What type of investor typically favors debt funds for capital preservation?

High-risk tolerance Low-risk tolerance Moderate-risk tolerance Speculative investors

What makes Gilt Funds a low-risk investment option?

Investment in corporate bonds Investment in real estate Investment in government securities Investment in commodities

What are Gilt Funds?

Equity funds investing in government projects Debt funds investing in government securities Hybrid funds balancing stocks and bonds Index funds tracking government bond performance

What is a key characteristic of Gilt Funds regarding lock-in periods?

Always have a lock-in period Typically do not have a lock-in period Lock-in period depends on the fund manager Lock-in period is determined by the RBI

How do Gilt Funds generate returns for investors?

Through dividends from government projects Through interest payments on government securities Through capital appreciation of government bonds Through profits from government-owned enterprises

What is the primary risk associated with Gilt Funds?

Default risk by the government Inflation risk eroding returns Fluctuations in interest rates Liquidity risk due to limited trading

How are returns from Gilt Funds taxed if units are redeemed within 36 months?

As Long Term Capital Gains (LTCG) As Short Term Capital Gains (STCG) As tax-free income As dividends

What type of investor is best suited for Gilt Funds?

Investors seeking aggressive growth Investors with a high-risk appetite Investors seeking capital preservation Investors looking for short-term gains

What is the main reason Gilt Funds are considered safe?

They are backed by tangible assets They are insured by the government They invest in government-issued securities They are managed by experienced fund managers

When do investors typically favor Gilt Funds?

During periods of economic stability During periods of high inflation During periods of economic unpredictability During periods of strong stock market performance