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A developed and robust corporate bond market becomes all the more important to support India's economic development. Which of the following are the advantages of a well developed Corporate Bond Market?
1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.
2. It can decrease external sector vulnerability.
3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.
Select the correct answer using the code given below.
1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.
2. It can decrease external sector vulnerability.
3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.
Select the correct answer using the code given below.
- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
A developed and robust corporate bond market becomes all the more impo...
A corporate bond is a debt issued by a company in order for it to raise capital. An investor who buys a corporate bond is effectively lending money to the company in return for a series of interest payments, but these bonds may also actively trade on the secondary market.
Corporate bonds are typically seen as somewhat riskier than government bonds, so they usually have higher interest rates to compensate for this additional risk.
A well developed corporate bond market supports economic development. It provides an alternative source of finance and supplements the banking system to meet the requirements of the corporate sector to raise funds for long-term investment for infrastructure.
It is believed that this segment acts as a stable source of finance when the equity market is volatile, and also enables firms to tailor their asset and liability profiles to reduce the risk of maturity.
It also helps in the diversification of risks in the system. In view of the huge investment required for the infrastructure sector, the presence of a well developed corporate bond market assumes significance in India. With the declining role of development finance institutions (DFIs), a developed and robust corporate bond market becomes all the more important.
The corporate bond market is likely to be more beneficial for business having longer-term cash flows, where investors may be wary of risks associated with equity and long-term financing from banks may not be easily available.
In India, while the banks still command a sizable presence in the economy, the corporate sector is taking recourse to the overseas markets for raising equity, debt and loans. An underdeveloped corporate bond market can encourage this trend, thereby increasing the external sector vulnerability. Therefore a well developed corporate bond would reduce external sector vulnerability.
Hence, all the statements are correct.
Corporate bonds are typically seen as somewhat riskier than government bonds, so they usually have higher interest rates to compensate for this additional risk.
A well developed corporate bond market supports economic development. It provides an alternative source of finance and supplements the banking system to meet the requirements of the corporate sector to raise funds for long-term investment for infrastructure.
It is believed that this segment acts as a stable source of finance when the equity market is volatile, and also enables firms to tailor their asset and liability profiles to reduce the risk of maturity.
It also helps in the diversification of risks in the system. In view of the huge investment required for the infrastructure sector, the presence of a well developed corporate bond market assumes significance in India. With the declining role of development finance institutions (DFIs), a developed and robust corporate bond market becomes all the more important.
The corporate bond market is likely to be more beneficial for business having longer-term cash flows, where investors may be wary of risks associated with equity and long-term financing from banks may not be easily available.
In India, while the banks still command a sizable presence in the economy, the corporate sector is taking recourse to the overseas markets for raising equity, debt and loans. An underdeveloped corporate bond market can encourage this trend, thereby increasing the external sector vulnerability. Therefore a well developed corporate bond would reduce external sector vulnerability.
Hence, all the statements are correct.
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A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?, a detailed solution for A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of A developed and robust corporate bond market becomes all the more important to support Indias economic development. Which of the following are the advantages of a well developed Corporate Bond Market?1. It provides an alternative source of finance to meet the requirements of funds for long-term infrastructure projects.2. It can decrease external sector vulnerability.3. It enables firms to manage their asset and liability profiles to reduce the risk of maturity.Select the correct answer using the code given below.a)1 and 2 onlyb)2 and 3 onlyc)1 and 3 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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