n NISM Certifications
X NISM Series X
Medium

The interest rate risk in a debt fund depends on:

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Credit quality of securities

  2. B

    Coupon of securities

  3. Tenor of securities

    Correct answer

  4. D

    None of the above

Why this is the answer

Longer maturity bonds are more sensitive to interest rate changes, hence higher interest rate risk.

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