The NAV of an open ended mutual fund scheme:2 pointsa) Is always constantb) Keeps going up at a steady ratec) Fluctuates with market price movementsd) Cannot go down at all
Question
The NAV of an open ended mutual fund scheme:2 pointsa) Is always constantb) Keeps going up at a steady ratec) Fluctuates with market price movementsd) Cannot go down at all
Solution
The correct answer is:
c) Fluctuates with market price movements
The Net Asset Value (NAV) of an open-ended mutual fund scheme is not constant (option a is incorrect). It changes every day based on the market value of the fund's assets.
The NAV does not necessarily keep going up at a steady rate (option b is incorrect). It depends on the performance of the securities in the fund's portfolio.
The NAV can indeed go down (option d is incorrect). If the market value of the fund's assets decreases, so does the NAV.
Therefore, the NAV of an open-ended mutual fund scheme fluctuates with market price movements.
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