SSC Economics Sample Paper NCERT Sample Paper-5

  • question_answer
    Which one of the following statements is incorrect about a Mutual Fund in India?

    A)  They are compulsory, registered with the SEBI, which also acts as the first wall defence for all investors in these funds.

    B)  Each mutual fund is run by a group of qualified people who form a company called an Asset Management Company (AMC)

    C)  The operations of the AMC are under the guidance of another group of people, called trustees.

    D)  The AMC and the trustees own no responsibility for the investor money in a mutual fund.

    Correct Answer: D

    Solution :

    [d] The process of setting up a Mutual Fund is initiated by a sponsor. The sponsor creates a Trust (the fund) under the Indian Trust Act. The Trust in turn appoints an Asset Management Company (AMC). The trustees are responsible for safeguarding the interests of the investors in the Mutual Fund by ensuring that the operations of the fund comply with the relevant regulations. The fund also has to be approved by the market regulator, which is the Securities and Exchange Board of India (SEBI).

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