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

While giving the mutual fund units for re-purchase, the distributor should consider the impact of Capital Gains Tax and ______ on the investor's portfolio.

Practice question from Nism Va Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Beta

  2. B

    Entry Load

  3. Exit Load

    Correct answer

  4. D

    Sharpe Ratio

Why this is the answer

Both taxes and loads reduce investment returns. Therefore, it is important for the distributor to consider these two aspects during repurchases/redemptions. This means that when there is a need to withdraw money from a scheme, the distributor must assess the implications of capital gains tax and exit loads.

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