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

Thematic funds are risky because of _________ in one theme.

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

Options

  1. A

    under exposure

  2. B

    high beta

  3. C

    diversification

  4. concentration

    Correct answer

Why this is the answer

Thematic funds invest based on a specific theme (e.g., infrastructure), leading to concentration risk. If the theme underperforms, the entire fund may perform poorly, unlike diversified funds.

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