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

_______ will help the investors understand the suitability of a mutual fund scheme to them.

Practice question from NISM Series V A - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Product Label

    Correct answer

  2. B

    Standard Deviation / Beta

  3. C

    Tracking Error

  4. D

    Alpha of the scheme

Why this is the answer

Product labeling helps investors understand the risk levels of different mutual fund schemes. SEBI introduced product labeling to address mis-selling issues and provide an easy way for investors to assess the suitability of a mutual fund scheme. The product label includes information such as the scheme's nature, investment objective, and risk level (depicted through color-coded boxes).

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