General Studies · Mutual Funds Regulations
According to the SEBI (Mutual Funds) Regulations, 1996, which of the following statements regarding the operation of Mutual Funds in India is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An Open-ended scheme allows investors to buy and sell units on a continuous basis at prices related to the NAV, which is calculated after every business day.✓
- 2Dividends received by the unit holders from a Mutual Fund are completely tax-free in the hands of the investors as the fund house pays a Dividend Distribution Tax (DDT).
- 3The NAV of a Mutual Fund scheme must be calculated and published on a daily basis for all schemes except for funds which are not listed on the stock exchange.
- 4In an Open-ended scheme, the fund house issues a fixed number of units during the New Fund Offer (NFO), and these units cannot be redeemed until the maturity of the scheme.
Correct answer
An Open-ended scheme allows investors to buy and sell units on a continuous basis at prices related to the NAV, which is calculated after every business day.
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