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

When should an investor adopt a strategy of limiting his equity exposure via equity index funds?

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

Options

  1. In the Accumulation phase

    Correct answer

  2. B

    In the Retirement phase

  3. C

    In the Sudden wealth phase

  4. D

    None of the above

Why this is the answer

In retirement, investors usually reduce overall equity exposure (shift to debt/liquid). The question specifically says via equity index funds → which are equity funds. Index funds are still equities, and in retirement phase one should reduce equity exposure, not just shift to index. A (Accumulation phase) is when an investor may limit exposure through safer equity index funds vs direct stocks, to reduce risk while still participating in growth.

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Nism VA Mock Test 5