Financial Markets and Instruments

The UTI Board of Trustees includes nominees from key financial institutions - RBI, LIC, and IDBI all have representation. The Bombay Stock Exchange (BSE), while a stock exchange, does not have a nominee on UTI's Board of Trustees.

Investor rights in mutual fund schemes are primarily laid down in the offer document (Scheme Information Document and Key Information Memorandum). Quarterly reports, annual reports, and marketing brochures provide information but do not constitute the primary legal document defining investor rights.

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.

Closed-end funds have a fixed capital raised through an initial offer, similar to an IPO. Once issued, shares cannot be redeemed at NAV but trade on stock exchanges. The offer document is issued only once at the time of the initial issue.

The offer document is a statutory disclosure document that provides scheme details and risk factors. The fund manager's short-term investment outlook is not included as it would be speculative and could mislead investors - the document focuses on facts, not forward-looking views.

Fundamental attributes of a scheme include investment objectives and other core features. These CAN be changed, but only after informing investors and obtaining approval from both SEBI and trustees. Option A is wrong because investment objectives ARE fundamental attributes. Option C is wrong because the offer document MUST be updated.

Unit holders have rights to dividends declared for the specific scheme they hold and proportionate ownership of that scheme's assets. However, different schemes in the same mutual fund house are separate trusts with distinct asset pools - unit holders have no rights to dividends from other schemes.

Unit holders are responsible for monitoring their investments, staying informed about material information, and studying the offer document. However, they do NOT make investment decisions about where the fund manager should invest - that is the fund manager's professional responsibility. Unit holders invest FOR the manager's expertise.

A no-load mutual fund does not charge any sales commission or load to investors when buying or selling fund units. The fund house absorbs the initial issue expenses and other costs associated with creating and managing the fund rather than passing them on to investors through entry or exit loads.

CDSC (Contingent Deferred Sales Charge) is an exit load that decreases as the holding period increases, incentivizing long-term investments. Entry loads are charged at purchase, not at redemption.

All listed options (A, B, C) are actual advantages of mutual funds: professional management provides expertise at scale, diversification spreads risk, and liquidity allows easy redemption. Since the question asks what is NOT an advantage, and none of these qualify as disadvantages, 'None of the above' is correct.

Option A is false (open-ended funds are NOT sold in secondary market - they're bought/sold directly from the AMC). Option B is false (closed-ended funds DO have fixed tenure). Option C is false (open-ended funds MUST calculate NAV daily). Only D is true - SEBI mandates closed-ended funds calculate NAV at least weekly, making it 'not false'.

 A mutual fund can benefit from economies of scale because of large volumes of trade

When schemes are taken over, offer documents must be updated (A), the AMC changes (B), and the sponsor may change (C). However, schemes do NOT need to be wound up - they continue under the new mutual fund.

Dividend payout does not give compounding benefits because dividends are paid out to the investor. Growth (A) and dividend reinvestment (C) both compound - growth keeps funds invested, reinvestment uses dividends to buy more units.