What is a potential advantage of the arbitrage component in Equity Savings Funds? Option: "It offers the possibility of low-risk returns", "It eliminates the need for any equity investments", "It guarantees high returns regardless of market conditions", "It shifts the fund's focus entirely to derivatives trading"

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What is a potential advantage of the arbitrage component in Equity Savings Funds?

"It offers the possibility of low-risk returns"

"It eliminates the need for any equity investments"

"It guarantees high returns regardless of market conditions"

"It shifts the fund's focus entirely to derivatives trading"

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What is the primary investment strategy of Equity Savings Funds?

"Investing in a mix of equities, debt, and arbitrage opportunities"

"Primarily investing in real estate and commodities"

"Focusing exclusively on high-risk, high-reward equities"

"Investing solely in debt instruments"

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What is a key feature that distinguishes Equity Savings Funds from other hybrid funds?

"The complete absence of debt investments"

"Their restriction to investments within a single industry"

"Their exclusive focus on large-cap stocks"

"Their utilization of arbitrage opportunities"

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What is a potential drawback of investing in Arbitrage Mutual Funds?

"Unpredictable returns due to the dependence on arbitrage opportunities"

"High susceptibility to market volatility and economic downturns"

"Complex tax implications due to their hybrid investment approach"

"Limited growth potential compared to long-term equity investments"

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How are Arbitrage Mutual Funds generally categorized in terms of risk?

"High-risk investments due to their active trading strategies"

"Moderate-risk investments as they balance equity and debt holdings"

"Variable-risk investments depending on the specific arbitrage opportunities pursued"

"Low-risk investments as they aim to minimize exposure to market fluctuations"

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What is considered the 'real arbitrage' in an arbitrage fund, according to the text?

Profiting from discrepancies in international markets

Taking advantage of short-term market inefficiencies

Exploiting price differences between cash and futures markets

The tax advantage of being treated as an equity fund while behaving like a debt fund