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With reference to the Negative-Yield Bonds, recently seen in the news, consider the following statements:
1. These are debt instruments that offer to pay the investor a maturity amount lower than the purchase price of the bond.
2. These are issued by the World Bank to the member states.
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 'A'. Can you explain this answer?
Verified Answer
With reference to the Negative-Yield Bonds, recently seen in the news,...
In News- Recently, China sold negative-yield debt for the first time, and this saw high demand from investors across the globe.
Option A is correct: A negative bond yield is when an investor receives less money at the bond's maturity than the original purchase price for the bond. A negative bond yield is an unusual situation in which issuers of debt are paid to borrow. These are generally issued by central banks or governments, and investors pay interest to the borrower to keep their money with them. 
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With reference to the Negative-Yield Bonds, recently seen in the news, consider the following statements:1. These are debt instruments that offer to pay the investor a maturity amount lower than the purchase price of the bond.2. These are issued by the World Bank to the member states.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 'A'. Can you explain this answer?
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