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

When does the market price of a close-ended mutual fund scheme converge with the NAV price?

Practice question from NISM series VA - Mid length mock test — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    During the New Fund Offer

  2. B

    Before the New Fund Offer

  3. Toward maturity

    Correct answer

  4. D

    It never converges

Why this is the answer

A close-ended scheme is listed on a stock exchange and its market price may fluctuate independently of the NAV. However, as the scheme approaches maturity, the market price converges towards the NAV.

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