Explanation:

1. Long-term capital loss can only be set off against long-term capital gain.

2. Short-term capital loss is to be set off against short-term capital gain or long-term capital gain

3. Capital loss, short-term or long-term, cannot be set off against any other head of income (e.g., salaries).

Thus, as per points 1 and 2, Long-term capital gains will be taxed after adjusting for both long-term and short-term capital loss.

Explanation:

If the investor invests in the US, and the US Dollar becomes stronger during the period of his investment, he benefits; if the US Dollar weakens (i.e., Rupee becomes stronger), he loses or the portfolio returns will be lower.

For eg. An investor invests Rs 80,000 to buy 1000 units of a US fund when the USDINR rate was Rs 80 per Dollar. If the US Dollar becomes stronger against Indian Rupee to say Rs. 82, he will receive Rs 82,000 when he repariates the amount to India. (Assuming the funds NAV remains the same).

Explanation:

A Compliance Officer signs a due-diligence certificate to the effect that all regulations have been complied with, and that all the intermediaries mentioned in the scheme related documents have the requisite statutory registrations and approvals. The Compliance Officer works closely with the Trustees on various compliance and regulatory issues. It is the responsibility of the compliance officer to report any issue of non-compliance directly and immediately to the trustees.

Explanation:

Conservative Hybrid Fund is an open-ended hybrid scheme investing predominantly in debt instruments. Investment in debt instruments shall be between 75 percent and 90 percent of total assets while investment in equity and equity instruments shall be between 10 percent and 25 percent of total assets.

Conservative Hybrid Fund can invest in only AAA-rated debt securities with a Macaulay duration of less than one year.

(The Macaulay duration of a bond is the weighted average maturity of cash flows, which acts as a measure of a bond’s sensitivity to interest rate changes. Bonds with a higher duration will carry more risk, and hence have a greater volatility in prices when compared to bonds with lower durations).

Explanation:

A Mutual Fund Scheme may be denominated in Indian Rupees (INR) which is different from the home currency for Foreign Portfolio Investors in the mutual fund units. The INR value of investments when translated into home currency by Foreign Portfolio Investors could be lower because of the currency movements.

The AMC does not manage currency risk for Foreign Portfolio Investors and it is the sole responsibility of the Foreign Portfolio Investors to manage or reduce currency risk on their own. The Sponsor/Fund/Trustees/ AMC are not liable for any loss to Foreign Investors arising from such changes in exchange rates.

Explanation:

Interval funds combine features of both open-ended and close-ended schemes. They are largely close-ended but become open-ended at pre-specified intervals. The benefit for investors is that, unlike in a purely close-ended scheme, they are not completely dependent on the stock exchange to be able to buy or sell units of the interval fund.

The options offered under a scheme allow investors to structure their investments in line with their liquidity preference and tax position.

Explanation:

SEBI has allowed a transaction charge per subscription of Rs. 10,000/- and above to be paid to distributors of the mutual fund products. The transaction charge, if any, is deducted by the AMC from the subscription amount and paid to the distributor; and the balance amount is invested.

However, there shall be no transaction charges on direct investments. Therefore the entire Rs. 25000 will be invested.

(In a Direct Plan, an investor has to invest directly with the AMC, with no distributor to facilitate the transaction)

Explanation:

AMFI has framed a set of guidelines and a code of conduct for intermediaries (known as AMFI Guidelines & Norms for Intermediaries (AGNI)), consisting of individual agents, brokers, distribution houses, and banks engaged in selling mutual fund products.

Explanation:

At the time of empaneling distributors and during the period i.e., review process, mutual funds/AMCs have to undertake a due diligence process to satisfy ‘fit and proper’ criteria that incorporate, amongst others, the following factors:

a. Business model, experience and proficiency in the business.

b. Record of regulatory/statutory levies, fines and penalties, legal suits, customer compensations made; causes for these and resultant corrective actions taken.

c. Review of associates and subsidiaries on the above factors.

d. Organizational controls to ensure that the following processes are delinked from sales and relationship management processes and personnel:

i. Customer risk/investment objective evaluation.

ii. MF scheme evaluation and defining its appropriateness to various customer risk categories.

Explanation:

Index Funds are open-ended scheme replicating/tracking a specific index. The minimum investment in securities of a particular index (which is being replicated/ tracked) shall be 95 percent of total assets.