ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) before it can collect funds from the public.

Detailed explanation-2: -7 (c) of the Regulations, any person who holds 40% or more of the net worth of an asset management company shall be deemed to be a sponsor and will be required to apply in Form A. While applying, please ensure that the main objects of the memorandum of the sponsor company permit it to carry on mutual fund activities.

Detailed explanation-3: -AMFI, the association of all the Asset Management Companies of SEBI registered mutual funds in India, was incorporated on August 22, 1995, as a non-profit organisation. As of now, 42 Asset Management Companies that are registered with SEBI, are its members.

Detailed explanation-4: -Explanation: Statement 1 is correct: A mutual fund collects money from investors and invests on their behalf. Mutual funds are considered an ideal investment avenue for regular investors who are less aware of investing surplus funds.

Detailed explanation-5: -b) Before venturing into mutual fund investment, it is imperative for you as an investor to obtain detailed information about the mutual fund scheme option. c) Diversify your portfolios. d) Avoid the clutter of portfolios. e) Assign a time dimension to the investment schemes. 11-Jan-2022