Identify the TRUE statement(s). (A) The Turnover Ratio will be higher in a momentum-oriented investment strategy of an equity mutual funD) (B) It’s always simpler to invest in balanced mutual funds as compared to investing separately in equity and debt funds, but this limits choices.

Practice question from Nism VA Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

A

Only A is true
B

Only B is true
Both A and B are true

Correct answer
D

None of the above are true

Why this is the answer

Momentum-oriented strategies focus on stocks that have shown strong recent performance, leading to a higher turnover ratio as the fund buys and sells frequently. Balanced mutual funds offer simplicity by combining both equity and debt in a single fund, but this limits the investor's control over the asset allocation between the two.

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