NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
Which of the following is a feature of a Liquid Fund as per SEBI norms?
A Liquid Fund invests in debt and money market securities with residual maturity of up to 91 days only. This short maturity keeps interest rate risk low, which is why SEBI places this limit on the Liquid Fund category.
- AIt invests in debt and money market securities with maturity up to 91 daysCorrect
- BIt invests in debt securities with maturity up to 3 years
- CIt invests only in government securities of any maturity
- DIt invests in money market instruments with maturity up to 1 year
Explanation
SEBI defines a Liquid Fund as an open-ended scheme investing in debt and money market securities with maturity of up to 91 days only. The 1-year limit is associated with other short-term categories, not Liquid Funds.
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