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

Identify the false statement(s): (A) While evaluating the mutual fund schemes, the expense ratio matters more in debt funds than equity funds (B) An Ultra-short term debt fund has to mandatorily invest in high credit quality debt securities

Practice question from Nism Va Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Only A is false

  2. Only B is false

    Correct answer

  3. C

    Both A and B is false

  4. D

    Neither 1 nor 2 is false

Why this is the answer

The expense ratio is more crucial for debt funds due to their lower returns compared to equity funds. However, ultra-short-term debt funds do not mandatorily have to invest in high credit quality debt securities, as the SEBI regulations on these funds are not as strict regarding credit quality.

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