What is the relationship between bond yields and bond prices?

Directly proportional Inversely proportional No relationship Unpredictable

How does an increase in interest rates affect bond prices?

Bond prices increase Bond prices decrease No impact on bond prices Impact depends on the bond type

What does modified duration measure in the context of debt mutual funds?

The average maturity of bonds in the portfolio The sensitivity of the fund's NAV to interest rate changes The credit risk of the fund's bond holdings The liquidity risk of the fund

Which type of debt fund primarily invests in money market instruments like CPs and CDs?

Low duration fund Money market fund Short duration fund Medium duration fund

What type of risk is a major concern for both short duration and medium duration funds?

Credit risk only Interest rate risk only Both credit risk and interest rate risk Liquidity risk only

What new type of risk did the Franklin India debt fund situation highlight for debt fund investors?

Inflation risk Currency risk Liquidity risk Geopolitical risk