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Options
- A
Both 1 and 2
-
Both 2 and 3
Correct answer
- C
Both 1 and 3
- D
All 1, 2 and 3
Why this is the answer
Scheme type and choice of investment universe drive the choice of benchmark in debt schemes. For example: Liquid schemes invest in securities of up to 91 days’ maturity. Therefore, a short-term money market benchmark such as NSE’s MIBOR or CRISIL Liquid Fund Index is suitable. Choice of Investment Universe: Gilt funds invest only in Government securities. Therefore, indices based on Government Securities are appropriate. Debt funds that invest in a wide range of Government and Non-Government securities need to choose benchmarks that are calculated based on a diverse mix of debt securities. The size of the scheme is immaterial.
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