Q. Consider the following statements regarding Mutual Fund schemes in India:
1.Open-ended mutual fund schemes allow investors to buy and sell units on an ongoing basis at NAV-based prices.
2.Closed-ended mutual fund schemes can be redeemed only on the stock exchange at market-determined prices before maturity.
3.Net Asset Value (NAV) is calculated as the total value of assets in the fund divided by the total number of units issued.
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation:
- Open-ended schemes allow investors to buy/sell units at any time directly from the fund at prices based on the Net Asset Value (NAV).
- While closed-ended schemes are traded on stock exchanges, investors are not required to redeem only through exchange. Redemption can occur at maturity, and schemes may be converted into open-ended funds as well.
- NAV is defined as the total value of investments in a scheme divided by the number of units
Source: Indian Economy (Dr. Ramesh Singh)
