Ch.11 · Scheme Performance Disclosure Rules · easy
A mutual fund fact sheet shows the scheme's 'credit quality' breakdown. What does a high allocation to 'AAA' rated instruments indicate?
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EXPLANATION
AAA is the highest credit rating assigned by rating agencies (CRISIL, ICRA, etc.), indicating the issuer has the strongest capacity to meet financial obligations. A high AAA allocation in a debt fund signals low credit risk — lower probability of default.
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