Multiple choice

Mutual funds have to value their investments

  1. At purchase price

  2. On a mark-to-market basis

  3. At par

  4. At book value
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Mutual funds in India must value their investments on a mark-to-market basis as per SEBI regulations. This means investments are valued at their current market price rather than purchase price or book value. Mark-to-market valuation ensures that the NAV reflects the true current value of the fund's holdings. Purchase price and book value do not account for market fluctuations.

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