alleryStart learning →Which legal document describes a mutual fund's investment objective and permitted investments?
ABalance sheet
BProspectus
CPartnership deed
DAudit memorandum
Answer & Solution
Correct answer: B. Prospectus
The prospectus sets out the objective, approach and the types of securities the fund may hold.
Keep practising Mutual Funds
Browse all Mutual Funds questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
What risk can arise when an ETF tracks assets using futures and swaps?Replication in an index ETF means doing what?An ETF arbitrage mechanism keeps which two values close?Who creates and redeems ETF shares directly with the issuer in large blocks?How does an ETF share differ from an open-end mutual fund unit?What is mismarking in securities valuation?How often are a fund's investments valued for NAV?How many units does a $50,000 investment buy in a no-load fund at NAV of $25?