Page 259 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes Open-ended Funds: In open-ended funds, there is no limit to the size of the funds. Investors can
invest as and when they like. The purchase price is determined on the basis of Net Asset Value
(NAV).
Specialised Funds or Industry Funds: These funds are invested in a particular industry like
cement, steel, jute, power or textile, etc.

Tax Relief Funds: These funds are raised for providing tax relief to those investors whose
income comes under taxable limits.
ULIPs: ULIPs are a category of goal-based financial solutions that combine the safety of insurance
protection with wealth creation opportunities.

12.10 Review Questions

1. Write brief note on the concept of mutual funds.
2. Explain the mutual fund operation flow chart.

3. Write a note on the history of mutual funds industry in India.
4. Explain the organizational functions of mutual funds.
5. What are the advantages of investing in mutual funds?

6. Are there any drawbacks of mutual funds in India? If yes, what are the drawbacks? What
are the means to overcome these drawbacks?
7. What are the different types of mutual funds schemes? Explain them one by one, with
examples.
8. Write a short note on:
(a) Open-ended schemes

(b) Close-ended schemes
(c) Interval schemes
9. Explain with examples mutual fund schemes based on investment objectives:
(a) Growth schemes
(b) Income schemes

(c) Balanced schemes
(d) Money market schemes
10. Write notes on tax saving schemes, special schemes, index schemes and sector-specific
schemes.
11. What do you mean by creation of a portfolio?
12. Explain portfolio revision.

Answers: Self Assessment

1. Trust 2. mutual fund

3. True 4. False
5. Decrease 6. No

254 LOVELY PROFESSIONAL UNIVERSITY