n NISM Certifications
NSM General NISM
Medium

What is the key advantage of an Arbitrage Fund for cautious investors?

Practice question from C5- Test Your Knowledge — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    High returns regardless of market volatility

  2. Risk-free profit by exploiting price differences between cash and futures market

    Correct answer

  3. C

    Mainly invests in international stocks

  4. D

    Charges the highest expense ratio among hybrid funds

Why this is the answer

Arbitrage Funds offer relatively risk-free profits by simultaneously buying and selling in different markets, suitable for cautious investors.

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