Question

    Mutual funds are pooled investment vehicles. Which of

    the following is a type of mutual fund that invests primarily in other schemes of the same mutual fund or other mutual funds?
    A Balanced Funds Correct Answer Incorrect Answer
    B Index Funds Correct Answer Incorrect Answer
    C ELSS Correct Answer Incorrect Answer
    D Fund of Funds Correct Answer Incorrect Answer
    E Gilt Funds Correct Answer Incorrect Answer

    Solution

    Fund of Funds scheme of the mutual fund invests primarily in other schemes of the same mutual fund or other mutual funds. Index funds replicate the portfolio of a particular index such as the BSE sensitive index, Nifty, etc. Balance fund schemes of the mutual fund are used to provide both growth and regular income and therefore invest in both equity and debt instruments. Gilt Fund of the mutual fund invests exclusively in government securities

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