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

Identify the FALSE statement/s. (1) When dividend is declared on mutual fund units which are under a lien, this dividend can be paid either to the unit-holder or to the lender depending on the agreement between them (2) Mutual Fund units cannot be pledged by individual investors.

Practice question from Nism Va Mock Test 1 — 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 1 and 2 are false

  4. D

    Neither 1 nor 2 is false

Why this is the answer

Both individual and non-individual investors can pledge their mutual fund units, typically to secure loans. The dividend (now referred to as Income Distribution Cum Capital Withdrawal - IDCW) can be paid to the unit-holder or the lender based on their agreement.

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