Ch.7 · NAV Calculation Rules · hard
What is 'amortisation' as a valuation method for short-maturity debt instruments?
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EXPLANATION
Amortisation values a debt instrument by accreting the discount (or amortising the premium) between purchase price and face value in a straight line over its remaining life. For money market instruments maturing within 30-60 days, SEBI permits amortisation instead of full MTM valuation, producing smoother NAV movement since these short-dated instruments have minimal price volatility.
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