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With reference to the Bond yield, consider the following statements:
1. It is the return an investor gets on that bond or on particular government security.
2. A rise in bond yields means interest rates in the monetary system have fallen, and investors' returns have declined.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
With reference to the Bond yield, consider the following statements:1....
Rising yields on government securities or bonds in the United States and India have triggered concern over the negative impact on other asset classes, especially stock markets, and even gold.
- Bond yield is the return an investor gets on that bond or on particular government security.
- The major factors affecting the yield is the monetary policy of the Reserve Bank of India, especially the course of interest rates, the fiscal position of the government and its borrowing programme, global markets, economy, and inflation.
- A fall in interest rates makes bond prices rise, and bond yields fall — and rising interest rates cause bond prices to fall, and bond yields to rise.
- In short, a rise in bond yields means interest rates in the monetary system have fallen, and the returns for investors (those who invested in bonds and govt securities) have declined.
- The yield on 10-year bonds in India moved up from the recent low of 5.76% to 6.20% in line with the rise in US yields, sending jitters through the stock market, where the benchmark Sensex fell 2,300 points last week.
Most Upvoted Answer
With reference to the Bond yield, consider the following statements:1....
Bond Yield
Bond yield refers to the return an investor receives on a bond or a particular government security. It is an important metric for investors as it helps them to evaluate the potential return on their investment.
Impact of Interest Rates
Interest rates have a direct impact on bond yields. When interest rates in the monetary system fall, it leads to a rise in bond yields. This is because investors demand a higher yield to compensate for the lower interest rate environment.
Correct Statement
Both the statements given in the question are correct. Statement 1 highlights the definition of bond yield, while statement 2 explains the relationship between bond yield and interest rates.
Bond yield refers to the return an investor receives on a bond or a particular government security. It is an important metric for investors as it helps them to evaluate the potential return on their investment.
Impact of Interest Rates
Interest rates have a direct impact on bond yields. When interest rates in the monetary system fall, it leads to a rise in bond yields. This is because investors demand a higher yield to compensate for the lower interest rate environment.
Correct Statement
Both the statements given in the question are correct. Statement 1 highlights the definition of bond yield, while statement 2 explains the relationship between bond yield and interest rates.
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With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for Current Affairs 2024 is part of Current Affairs preparation. The Question and answers have been prepared according to the Current Affairs exam syllabus. Information about With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Current Affairs 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Bond yield, consider the following statements:1. It is the return an investor gets on that bond or on particular government security.2. A rise in bond yields means interest rates in the monetary system have fallen, and investors returns have declined.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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