Multiple choice

The fund sponsors should hold financial track record of

  1. 7 years

  2. 12 months

  3. 5 years

  4. 3 years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Fund sponsors must demonstrate a sound financial track record of 5 years to establish their credibility and capability to support the AMC. This requirement ensures sponsors have proven financial stability and experience before being permitted to sponsor mutual funds. The 5-year period balances the need for experience without being excessively restrictive like 7 years, or too short like 1-3 years.

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