alleryStart learning →A Liquid Fund invests only in debt and money market securities with a maximum residual maturity of
A1 day
B1 year
C6 months
D91 days
Answer & Solution
Correct answer: D. 91 days
1. Liquid Fund is a SEBI category of open-ended debt scheme.
2. Investments are restricted to debt and money market securities of up to 91 days maturity.
3. This tight ceiling on tenor keeps volatility low.
4. Overnight Funds sit even shorter, at 1 day maturity; Money Market Funds go up to 1 year.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 2 "Concept and Role of a Mutual Fund", §2.2.4B(2)_
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