Ch.12 · Model Portfolios and Asset Allocation · easy
An investor needs ₹5 lakh in 6 months for a planned vacation. Which fund type is MOST suitable?
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EXPLANATION
For a 6-month horizon, capital preservation is paramount. Ultra short duration or low duration debt funds invest in short-term instruments with minimal interest rate risk, making them appropriate for near-term goals. Equity funds are entirely unsuitable for such short horizons due to market volatility.
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