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

Which of these statements is true with respect to a Switch transaction?

Practice question from NISM Series V A - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Switch transaction is allowed only after one year from the date of purchase

  2. B

    Switch transaction is similar to a purchase transaction

  3. C

    Switch transaction is similar to a sale transaction

  4. Switch transaction is a redemption from one mutual fund scheme and simultaneous purchase into another scheme

    Correct answer

Why this is the answer

A switch transaction involves selling units from one mutual fund scheme and using the proceeds to purchase units in another scheme. It is essentially a combination of redemption and purchase.

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