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    Question

    Refer to the following information to answer the next 4 questions (Q27 to Q30) Mutual funds are investment vehicles that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. This allows individual investors access to a broader range of assets than they might be able to manage on their own. Investors seeking to optimize their financial strategies often consider different types of investment plans that suit various financial goals and life stages. In mutual funds SWP, SIP, and STP are three such strategies that enable investors to manage their finances with flexibility and precision. Each of these plans serves a unique purpose, ensuring that investors can tailor their investment approaches to fit their specific financial needs and future aspirations.

     Regarding Systematic Withdrawal Plans (SWP) within the

    framework of mutual funds, which of the following best describes its primary function?
    A To allow regular, fixed investment into various mutual fund schemes. Correct Answer Incorrect Answer
    B To enable the transfer of investment from one mutual fund to another. Correct Answer Incorrect Answer
    C To facilitate regular withdrawals from a mutual fund investment. Correct Answer Incorrect Answer
    D To maximize the return on investment by reinvesting dividends. Correct Answer Incorrect Answer
    E To provide a hedge against market volatility through diversified investment. Correct Answer Incorrect Answer

    Solution

    SWP allows investors to withdraw fixed amounts from their investments at specified intervals, making it a viable option for generating regular income, especially during retirement.

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