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Exam CIFC Topic 1 Question 218 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 218
Topic #: 1
Which of the following is a characteristic of a bond fund?

Suggested Answer: A Vote an answer

Explanation
A bond fund is a mutual fund that invests primarily in bonds and other debt securities. Income from a bond fund will primarily be interest but may also be capital gains if the fund sells bonds that have appreciated in value. Bond funds are not very low risk because they can fluctuate in value depending on interest rate changes and credit risk. If interest rates rise, the value of a bond fund will tend to fall because existing bonds will become less attractive than new bonds with higher rates. Securities regulation does not specify that bond funds must invest in investment grade bonds, although some funds may have this as an investment objective or policy. References: What Is a Bond Fund?

by Hardy at Jun 21, 2024, 10:34 AM

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