Podcast
Questions and Answers
What is a mutual fund?
What is a mutual fund?
- A direct investment in stocks and bonds by individual investors
- A collective investment vehicle that pools money from multiple investors and invests in various financial instruments (correct)
- A government-regulated savings account for long-term investments
- A type of insurance policy that guarantees returns on investment
How are the income and gains generated from a mutual fund scheme distributed?
How are the income and gains generated from a mutual fund scheme distributed?
- Based on the amount of initial investment by each investor
- Equally amongst the investors regardless of expenses and levies
- Proportionately amongst the investors after deducting applicable expenses and levies (correct)
- Only to the fund managers as part of their compensation
In what form are mutual funds established in India?
In what form are mutual funds established in India?
- In the form of a Trust under Indian Trust Act, 1882 (correct)
- As government entities under the Ministry of Finance
- As private partnerships under SEBI regulations
- As publicly traded companies on the stock exchange
Who manages the investments in a mutual fund?
Who manages the investments in a mutual fund?
What is the purpose of calculating a scheme’s “Net Asset Value” or NAV?
What is the purpose of calculating a scheme’s “Net Asset Value” or NAV?
Flashcards
Mutual Fund
Mutual Fund
A pooled investment where many investors put money together to buy various financial products.
Fund Income Distribution
Fund Income Distribution
Money earned from the fund is divided fairly among investors after expenses are taken out.
Mutual Fund Structure in India
Mutual Fund Structure in India
Established as a trust under Indian law.
Fund Management
Fund Management
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Net Asset Value (NAV)
Net Asset Value (NAV)
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Study Notes
Mutual Funds
- A mutual fund is a type of investment vehicle that pools money from many investors to invest in a variety of assets, such as stocks, bonds, or commodities.
Distribution of Income and Gains
- Income and gains generated from a mutual fund scheme are distributed to the unit holders in proportion to the number of units held by them.
Establishment of Mutual Funds in India
- Mutual funds in India are established in the form of a trust, which is a fiduciary relationship between the mutual fund and its unit holders.
Investment Management
- Investments in a mutual fund are managed by a professional fund manager, who is responsible for making investment decisions on behalf of the unit holders.
Net Asset Value (NAV)
- The purpose of calculating a scheme's Net Asset Value (NAV) is to determine the value of each unit of the mutual fund, which is the total value of the scheme's assets minus its liabilities, divided by the total number of outstanding units.
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