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

The additional Total Expense Ratio (TER) charged has to be credited back to the Mutual Fund in which of these situations?

Practice question from NISM Series V A - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    When the performance of the mutual fund declines compared to the previous year

  2. When the inflows from beyond the top 30 cities are redeemed within 1 year from the date of investment

    Correct answer

  3. C

    When the TER of the mutual fund exceeds the limit specified under the regulations

  4. D

    All of the above

Why this is the answer

Mutual funds can charge an additional TER if the new inflows are from beyond the top 30 cities (subject to specific conditions). However, this additional TER will be credited back to the scheme if these inflows are redeemed within one year from the date of investment.

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