Multiple choice

For an open ended scheme, initial issue expenses

  1. can be amortised over a period of 10 years

  2. can be amortised over a period not exceeding 5 years

  3. can not be recovered from investors

  4. can be amortised over the life of the scheme
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For open-ended schemes, SEBI regulations allow initial issue expenses to be amortized over a period not exceeding 5 years. This systematic recovery prevents front-loading all costs on early investors.

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