📊 NISM Series V-D Chapter 2 of 22 ⚖ 4 of 150 marks weightage

Ch.2: Concept & Role of a Mutual Fund

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 2: Concept & Role of a Mutual Fund — covering the basic concept and definition of a mutual fund, the trust structure, key constituents (Sponsor, Trustee, AMC, Custodian, RTA) and their roles, advantages and disadvantages of investing via mutual funds, and the role of SEBI/AMFI in regulation. Carries 4 out of 150 marks. The exam has 150 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Basic concept and definition of a mutual fund, and the mutual fund trust/scheme structure
Key constituents of a mutual fund — Sponsor, Trustee, AMC, Custodian, Registrar and Transfer Agent (RTA) — and their distinct roles
Eligibility criteria for a Sponsor, and the regulatory requirements applicable to an AMC
Advantages of investing through mutual funds (professional management, diversification, liquidity) versus their disadvantages/risks
Role of SEBI and AMFI in regulating and self-regulating the mutual fund industry

Key Terms:Mutual Fund TrustSponsorTrusteeAMCCustodianRegistrar and Transfer Agent (RTA)AMFISEBI (Mutual Funds) Regulations, 1996Interval FundNet Asset Value

Free Sample Question

Q1MCQEasyBasic concept of Mutual Fund

What is the primary function of a mutual fund from an investor's perspective?

ATo provide direct loans to corporations.

✓To pool money from multiple investors and invest in a diversified portfolio.

CTo offer insurance coverage against market risks.

DTo act as a direct lender in the interbank market.

💡 A mutual fund primarily pools money from a large number of investors and invests it across a diversified portfolio of securities (e.g., stocks, bonds, money market instruments), managed by professional fund managers. This allows investors to achieve diversification and professional management with smaller investment amounts.

24 more questions in this chapter

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About this content: These practice questions are based on the NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination Workbook published by the National Institute of Securities Markets (NISM), Mumbai (March 2026 edition). NISM is a SEBI-established institution. Questions cover Chapter 2: Concept & Role of a Mutual Fund with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 24, 2026.

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