Debt funds, by safety and time
Two risks, and the time ladder
Debt funds feel dull next to equity, and that is the point. But the exam tests two risks here that people mix up, so we make the difference stick.
This lesson teaches a concept for the NISM Series V-A exam. It is education, not financial advice.
- 1
Debt funds lend money: they hold bonds and money-market instruments, not shares.
- 2
They carry two main risks: interest rate risk (prices move when rates change) and credit risk (a borrower may default).
- 3
Liquid funds hold very short paper, up to 91 days, and are used to park cash safely.
- 4
Longer-duration funds can earn a little more but swing more when rates move.
Idle ₹1 lakh for a month? A liquid fund is a common home. Locking in for a few years? A longer debt fund may suit.
Practice
🔥 0 streakReal exam format. Answer by voice, tap, or press 1 to 4. No negative marking, so always attempt.
Debt funds mainly invest in:
A liquid fund holds instruments maturing within:
The risk that a borrower fails to repay is called:
When interest rates rise, existing bond prices generally:
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Education for the exam, not financial advice. Answers can be wrong, so confirm figures against the workbook.