n NISM Certifications
NSM General NISM
Medium

If an investor wants to diversify across three asset classes with minimum 10% allocation each, which fund type suits best?

Practice question from Test Your Knowledge — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Fund of Funds

  2. B

    Balanced Hybrid Fund

  3. Multi Asset Allocation Fund

    Correct answer

  4. D

    Arbitrage Fund

Why this is the answer

Multi Asset Allocation Funds invest in at least three asset classes with a minimum allocation of 10% in each, enhancing diversification.

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