n NISM Certifications
V-A NISM Series V-A
Medium

Identify the FALSE statement/s. (1) Arbitrage funds have lower risk as compared to Equity Funds (2) The main objective of an Arbitrage Fund is to provide capital appreciation (3) Arbitrage funds can invest in both Futures/Options (F&O) and cash markets

Practice question from NISM Series V A - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Only 1 is false

  2. Only 2 is false

    Correct answer

  3. C

    Both 2 and 3 are false

  4. D

    Both 1 and 3 are false

Why this is the answer

Arbitrage funds aim to provide returns similar to debt funds by exploiting price differences between the cash and futures markets, and do not focus on capital appreciation.

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