Multiple choice

His maximum amount of initial issue expenses that can be recovered from the investors is limited to

  1. Rs.10 Crores

  2. 2.25% of NAV

  3. 6% of the amount mobilized during NFO

  4. unlimited
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As per SEBI regulations, mutual funds can recover initial issue expenses up to a maximum of 6% of the amount mobilized during the NFO period. This is amortized over the scheme's life. Options A, B, and D are incorrect. The 6% limit is fixed regardless of the actual mobilized amount. This expense cap protects investors from excessive fundraising costs.

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