NISM V-C Investment Strategies and Fund Categories — Practice Questions
Questions on the full range of fund categories — equity, debt, hybrid and solution-oriented schemes, fund of funds, infrastructure debt funds and real estate mutual funds — and how they compare.
31 questions on Fund Categories in the ScoreSetu bank — each with a detailed explanation and, where useful, a memory hook.
What this topic covers
- Equity, debt and hybrid categories
- Solution-oriented schemes
- Fund of funds
- Infrastructure debt and real estate funds
Free sample questions
1. Capital Protection Oriented Schemes are always _________ .
- A. Open-ended
- B. Close-ended ✅
- C. Interval funds
- D. Exchange-traded funds
Answer: B — Close-ended
Why: Capital protection-oriented schemes are close-ended schemes designed to protect the invested capital at the end of the term while attempting higher returns than fixed income funds. They invest in highest-rated debt that grows to the capital amount at maturity, plus equity; the structure works only with a fixed term, so they are always close-ended.
💡 Capital Protection Oriented Schemes are ALWAYS close-ended.
2. A Fund of Funds can invest in other mutual funds which have exposures in ______ .
- A. international equities
- B. gold
- C. domestic equities
- D. All of the above ✅
Answer: D — All of the above
Why: A Fund of Funds invests in units of other mutual fund schemes rather than directly in securities, with at least 95 percent of total assets in the underlying fund(s). The underlying schemes may be domestic equity funds, overseas funds or gold ETFs, so a FoF can take exposure to international equities, gold and domestic equities. Hence all of the above.
💡 FoF can hold MFs exposed to international equities, domestic equities AND gold (all).
3. In a Capital Protection scheme, the capital protection is ensured by investing in ______ .
- A. Company Debentures
- B. Treasury Bills ✅
- C. Zero Coupon Bonds
- D. ELSS Funds
Answer: B — Treasury Bills
Why: Capital Protection Funds invests both in Equity and Debts as per a formula to ensure capital protection. In case the equity investment loses money, the interest earned out of debt covers for it. This debt is mostly in the form of 100% Government Securities. Among the above options, Treasury Bills are Government Securities.
💡 Capital Protection fund secures capital via debt/G-Secs; Treasury Bills are Govt securities.
Practise all 31 Fund Categories questions
Plus the full 340-question NISM V-C bank and real-feel mock exams.