alleryStart learning →What does a custodian bank do for a mutual fund?
ASells shares to investors
BSafekeeps assets, collects income
CSets the management fee rate
DApproves new share classes
Answer & Solution
Correct answer: B. Safekeeps assets, collects income
The custody fee pays the bank that safeguards the securities and collects the income owed on them.
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?