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 ______ and ______ on the investor's portfolio.

Practice question from NISM Series V A - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Exit Load; Capital Gains Tax

    Correct answer

  2. B

    Exit Load; Entry Load

  3. C

    Entry Load; Capital Gains Tax

  4. D

    Entry Load; Beta

Why this is the answer

Both exit load (charges for redeeming units) and capital gains tax (taxes on profits from sale of units) reduce the returns on an investor's portfolio. A distributor must consider these when facilitating the redemption of mutual fund units.

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