Multiple choice

When selling a mutual fund, a good agent would never

  1. describe the past performance of the scheme

  2. compare the fund with other mutual funds

  3. assure a rate of return

  4. compare the fund with other financial products
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A good mutual fund agent never assures or guarantees a rate of return because all mutual funds (except debt funds to some extent) carry market risk and returns are NOT guaranteed. It's both unethical and regulatory non-compliance to promise assured returns. Agents can and should describe past performance, compare funds, and compare with other products - but promising returns is prohibited.

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