Multiple choice

A mutual fund may transfer investments from one scheme to another

  1. not at all

  2. at current market rates

  3. at cost price

  4. at a fixed premium over market rate
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

SEBI regulations mandate that transfers between mutual fund schemes must be done at current market rates (determined by NAV). This protects existing investors from unfair cross-subsidization where assets could be moved at artificial prices. Transfers at cost price or fixed premiums could create advantages/disadvantages for different investor groups.

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