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Consider the following statements with respect to Government Security (G-Sec)
1. G-Sec acknowledges the Government’s debt obligation
2. G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.
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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Consider the following statements with respect to Government Security ...
The government and RBI are working on inclusion of Indian sovereign bonds in global bond indices
The move is expected to attract foreign inflows in the debt market, help the government is its market borrowing programme and keep a check on yields.
A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more). In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.
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Consider the following statements with respect to Government Security ...
's debt obligation to the bondholder.
2. G-Sec is issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
3. G-Sec can be bought and sold in the secondary market.
4. G-Sec provides a fixed rate of return to the bondholder.
5. G-Sec is considered a safe investment with low risk.
Which of the above statements are correct?
1. Statement 1 is correct. G-Sec acknowledges the Government's debt obligation to the bondholder.
2. Statement 2 is correct. G-Sec is indeed issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
3. Statement 3 is correct. G-Sec can indeed be bought and sold in the secondary market.
4. Statement 4 is incorrect. G-Sec provides a fixed rate of interest, not necessarily a fixed rate of return, to the bondholder.
5. Statement 5 is correct. G-Sec is indeed considered a safe investment with low risk.
Therefore, statements 1, 2, 3, and 5 are correct.
2. G-Sec is issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
3. G-Sec can be bought and sold in the secondary market.
4. G-Sec provides a fixed rate of return to the bondholder.
5. G-Sec is considered a safe investment with low risk.
Which of the above statements are correct?
1. Statement 1 is correct. G-Sec acknowledges the Government's debt obligation to the bondholder.
2. Statement 2 is correct. G-Sec is indeed issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
3. Statement 3 is correct. G-Sec can indeed be bought and sold in the secondary market.
4. Statement 4 is incorrect. G-Sec provides a fixed rate of interest, not necessarily a fixed rate of return, to the bondholder.
5. Statement 5 is correct. G-Sec is indeed considered a safe investment with low risk.
Therefore, statements 1, 2, 3, and 5 are correct.
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Consider the following statements with respect to Government Security (G-Sec)1. G-Sec acknowledges the Government’s debt obligation2. G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.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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