Ch.10 · Benchmarks and Performance Evaluation · hard
What is 'amortisation' in the context of debt fund valuation?
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EXPLANATION
Amortisation is an alternative to full MTM valuation for certain debt instruments (particularly money market instruments maturing within 30-60 days). Instead of daily market price-based valuation, the premium or discount to face value is spread evenly to maturity date. This produces smoother, more stable NAV movement compared to full MTM.
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