Multiple choice

The differentiating factor among debt funds of comparable maturity and quality is

  1. gross yields

  2. costs

  3. fund age

  4. tenure of the fund manager
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A Correct answer
Explanation

Among debt funds with similar maturity profiles and credit quality (comparable risk), the gross yield becomes the key differentiating factor. Since maturity and quality are held equal, the fund offering higher gross yields will typically provide better returns, all else being equal. Costs (expense ratios), fund age, and fund manager tenure matter but are secondary considerations when comparing funds that are otherwise similar in their fundamental risk-return characteristics. Gross yield directly indicates the income potential.

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