Banking · Portfolio Management Services
Analyze the following scenario involving Portfolio Management Services (PMS). A high-net-worth individual (HNI) invests 5 Crore INR in a 'Discretionary PMS' provided by a private sector bank. During a market downturn, the bank's portfolio manager invests a significant portion of the funds in high-risk unlisted derivatives. The investor suffers a 40 percent loss and sues the bank for breach of contract. Based on SEBI guidelines, what is the most critical factor in determining the bank's liability?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The absolute amount of financial loss suffered by the investor.
- 2Whether the investments complied with the 'Investment Strategy' and 'Risk Profile' agreed in the disclosure document.✓
- 3The historical volatility of the overall stock market index during that quarter.
- 4The fact that the bank is a private sector bank rather than a public sector bank.
Correct answer
Whether the investments complied with the 'Investment Strategy' and 'Risk Profile' agreed in the disclosure document.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Portfolio Management Services MCQs →Want more practice questions on Portfolio Management Services?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Portfolio Management Services