Which fund type invests in short- and long-term debt instruments?(1.0 Marks)Hybrid FundsAEquity FundsBOpen Ended FundsCDebt FundsDPrevious

Break Down the Problem

1. Identify the characteristics of the different fund types listed in the options.
2. Determine which fund type primarily invests in debt instruments.

Relevant Concepts

1. Hybrid Funds: These invest in a mix of equity and debt instruments.
2. Equity Funds: These primarily invest in stocks and shares of companies.
3. Open Ended Funds: These can be any type of fund that allows for continuous buying and selling.
4. Debt Funds: These funds specifically invest in fixed income securities like bonds and other debt instruments.

Analysis and Detail

• Hybrid Funds: While they include some debt instruments, they also focus on equity, meaning they are not exclusively invested in debt.
• Equity Funds: Clearly focused on stocks, thus irrelevant to the question.
• Open Ended Funds: This term is more about the fund's structure rather than its investment strategy.
• Debt Funds: These are specifically designed to invest in both short-term and long-term debt instruments.

Verify and Summarize

In evaluating the definitions and investments of the funds mentioned, it is clear that Debt Funds exclusively focus on debt instruments, making them the correct choice.

Final Answer

Debt Funds (Option D) invest in short- and long-term debt instruments.