What does PRC stand for in the context of debt mutual funds?

"Potential Risk Calculation" "Predicted Risk Class" "Potential Risk Class" "Portfolio Risk Control"

What is the primary purpose of the PRC matrix introduced by SEBI for debt mutual funds?

"To predict future market fluctuations" "To calculate the exact returns of a fund" "To help investors make informed decisions about risk" "To replace the existing riskometer system"

Which of the following is NOT a category of risk considered in the PRC matrix?

"Interest rate risk" "Credit risk" "Market risk" "Inflation risk"

How does the PRC matrix differ from the riskometer in assessing risk associated with debt mutual funds?

"The PRC matrix focuses on short-term risks, while the riskometer assesses long-term risks" "The PRC matrix considers only credit risk, while the riskometer considers both credit and interest rate risks" "The PRC matrix provides a futuristic view of potential risk, while the riskometer reflects current risk" "The PRC matrix is updated daily, while the riskometer is updated monthly"

What does Macaulay Duration (MD) determine in the context of the PRC matrix?

"The average maturity period of bonds in a fund" "The potential credit risk of a debt fund" "The interest rate sensitivity of a debt fund" "The overall risk profile of a debt fund"

Which class of interest rate risk represents the highest potential risk according to the PRC matrix?

"Class I" "Class II" "Class III" "Class A"

What is the relationship between Credit Risk Value (CRV) and potential credit risk?

"Higher CRV indicates higher credit risk" "CRV is not related to credit risk" "Lower CRV indicates lower credit risk" "Higher CRV indicates lower credit risk"

Which of the following securities would likely have the lowest CRV based on the information provided?

"Government securities" "AAA-rated securities" "Unrated securities" "Corporate bonds"

A debt fund classified as "C-III" in the PRC matrix would have:

"Lowest interest rate risk and lowest credit risk" "Lowest interest rate risk and highest credit risk" "Highest interest rate risk and lowest credit risk" "Highest interest rate risk and highest credit risk"

Why is the PRC matrix considered beneficial for prudent investors?

"It guarantees higher returns on debt fund investments" "It eliminates all risks associated with debt mutual funds" "It helps identify debt funds that align with their risk tolerance" "It provides insights into future market trends"