What type of debt instrument does an overnight fund primarily invest in?

Corporate bonds Treasury bills Tri-party Repo (TREPS) Commercial papers

What is the typical maturity period of securities held by an overnight fund?

Up to 91 days 1 year 24 hours 3 to 6 months

Why is the performance of different overnight funds generally similar?

They all invest in the same type of instrument (TREPS) They have identical expense ratios They are managed by the same fund managers They are all regulated by the same government agency

What does 'Macaulay Duration' of a bond indicate?

The time remaining until the bond's maturity date The bond's interest rate or coupon payment The time it takes for the bondholder to recover the invested amount The risk of default associated with the bond

What is the typical Macaulay Duration range for an ultra-short duration fund?

Less than 3 months 3 to 6 months 1 to 2 years More than 2 years

What type of investor might find an ultra-short duration fund suitable?

Someone seeking the highest possible returns Someone looking for a risk-free investment Someone parking funds for the very short term (less than 3 months) Someone looking to park money for 1-2 years with some risk tolerance

What was the primary reason for the decline in the NAV of Franklin India's Ultra-short bond fund in the Vodafone case?

Poor fund management decisions A sudden change in interest rates Downgrading of Vodafone's debt papers due to potential default A general downturn in the bond market

What is a key takeaway regarding the risk associated with debt funds?

Debt funds are completely risk-free Only overnight funds carry risk All debt funds carry some degree of risk, including credit default and rating downgrade Debt funds are riskier than equity funds