What are the potential risks associated with investing in debt funds? Option: "Investing in high-risk corporate bonds", "Higher returns than equity funds", "Fixed interest rates unaffected by market conditions", "Guaranteed returns regardless of economic climate"

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What are the potential risks associated with investing in debt funds?

"Investing in high-risk corporate bonds"

"Higher returns than equity funds"

"Fixed interest rates unaffected by market conditions"

"Guaranteed returns regardless of economic climate"

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Which of the following is a potential drawback of investing in debt funds?

"Potential for long-term growth"

"Full protection from risks"

"Lower returns compared to equity options"

"High returns"

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Which of the following is NOT a benefit of investing in corporate bond funds?

Guaranteed returns with no risk of loss

Higher returns compared to other debt instruments

High liquidity allowing easy conversion to cash

Security due to the financial obligation on the company

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

Only overnight funds carry risk

Debt funds are riskier than equity funds

Debt funds are completely risk-free

All debt funds carry some degree of risk, including credit default and rating downgrade

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Why should investors be cautious of credit risk funds?

"They are not well-diversified, increasing the impact of any single default"

"They invest in bonds with low credit ratings to generate higher returns, increasing the risk of default"

"They are subject to frequent changes in interest rates, leading to volatility"

"They have high expense ratios, reducing overall returns"

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Which type of mutual fund is known for potentially higher returns but also higher risk?

"Debt funds"

"Fund of funds"

"Hybrid funds"

"Equity funds"