Series V-AEasyMutual Fund Structure

Which of the following is a key feature of an open-ended mutual fund scheme?

AIt has a fixed maturity period and is listed on a stock exchange
BUnits are available for subscription and repurchase on a continuous basis at NAV-based pricescheck_circle
CIt has a mandatory lock-in period of 3 years for all investors
DIt invests only in government securities and fixed deposits

Correct answer

B. Units are available for subscription and repurchase on a continuous basis at NAV-based prices

lightbulbDetailed Solution

Open-ended schemes do not have a fixed maturity period. Investors can buy (subscribe) and sell (redeem) units on a continuous basis at prices linked to the Net Asset Value (NAV). This provides high liquidity, unlike close-ended schemes which have a fixed maturity and are listed on an exchange.

Reference: NISM Series V-A Mutual Fund Distributors, Chapter 2.

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