Ch.11 · Scheme Performance Disclosure Rules · hard
What should an investor analyse when comparing two debt funds with similar returns but very different portfolio turnover ratios?
0% of students got this wrong
EXPLANATION
Low turnover in a debt fund suggests a buy-and-hold accrual approach; high turnover suggests active interest rate trading (duration management). The former is more predictable; the latter carries more mark-to-market risk. An investor should align the fund's strategy with their own risk comfort.
Practising Chapter 11 one question at a time?
Try the full chapter — 60 questions, tracked score, weak area breakdown.