Multiple choice

The Capital of a scheme does not include

  1. unit capital

  2. reserves

  3. borrowing

  4. net worth of the AMC
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The capital of a mutual fund scheme includes unit capital (money raised from investors), reserves (surplus from profits), and borrowing (limited to 20% of scheme assets). The net worth of the Asset Management Company (AMC) is separate and not part of the scheme's capital - the AMC is the scheme sponsor/manager.

Keep practicing — related questions