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      Question

      A fund in which large number of small investors invest

      so that resources can be pooled for investments in shares and other securities.
      A Currency Fund Correct Answer Incorrect Answer
      B Mutual Fund Correct Answer Incorrect Answer
      C Debt Fund Correct Answer Incorrect Answer
      D Hybrid Funds Correct Answer Incorrect Answer
      E Capital market fund Correct Answer Incorrect Answer

      Solution

      Mutual fund, usually run by an asset management company, brings together a group of people and invests their money in stocks, bonds and other securities. You can invest in Mutual Funds by buying mutual fund 'units'. These units can be purchased or redeemed as needed at the fund's current net asset value (NAV). These NAVs keep fluctuating, according to the fund's holdings. All the mutual funds are registered with SEBI. The biggest advantage of investing through a mutual fund is that it gives small investors access to professionally-managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult to create with a small amount of capital.

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