n NISM Certifications
NSM General NISM
Medium

An investor wants equity-like returns with potentially lower volatility through hedging strategies. Which product may suit this investor best?

Practice question from Advanced B1 S2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Savings account

  2. B

    Traditional FD

  3. SIF

    Correct answer

  4. D

    PPF

Why this is the answer

SIFs can use derivatives and hedging mechanisms to attempt better risk-adjusted returns and potentially reduce volatility.

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