please please help 11. A mutual fund can purchase shares in their own company. 1
ID: 2792666 • Letter: P
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please please help
11. A mutual fund can purchase shares in their own company. 12. A peer group of funds consists of those funds with a similar investment mandate. 13. An asset allocation fund manager is required to hold a specified minimum percentage of bonds and equities. 14. The valuation of real estate funds is based on the appraisal values of the underlying properties in the portfolio. 15. F class funds typically charge a MER that is lower than the MER on the reg they are attached to. 16. Structured products are generally considered more liquid than managed 17. Managed products were introduced long before structured products 18. Active managers attempt to mimic the performance of an underlying index_ products. 19. Commission-based business models are gaining in popularity 20. A mortgage-backed security is considered a type of managed productExplanation / Answer
11. False.
12. True. peer group of funds is defined as a group of funds with similar characterstics and investment mandates
13. False. There is no minimum percentage specified. However, maximum holding % is specified by SEBI. For equity funds, the investment in equity shares or equity-related securities of a single company must not exceed 10% of the net assets of the scheme. For debt funds, the investment in investment grade debt instruments issued by a single issuer should not exceed 15% of the net assets, which can be extended to 20% with the prior approval of trustees and board of AMC.
14. True. Real estate funds (direct investment) are based on the appraised value of underlying properties in the portfolio.
15. True. F series funds do not pay commissions to advisers, therefore they have lower MER.
16. False. Due to the customized nature of investment, structured products are less liquid than managed products.
17. True.
18. False. Active managers try to outperform any benchmark index.
19. True. Due to increase in the e-commerce business, the use of commision based business model has increased.
20. False. A mortgage-backed security is a type of structured product.
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