Advantages and disadvantages of investing in gilts, Financial Management

Assignment Help:

Advantages and Disadvantages of Investing in Gilts

Advantages

As the security is issued by the GOI, it has a minimal default risk.

Investors have the opportunity to invest in very long-term debt sometimes up to 20 years because of the long maturity periods.

Almost all issues by the government have adequate liquidity except for a few. With the primary dealer authorized to deal in the buying and selling, he can take care of the liquidity.

 

Tax benefits

Tax benefits under Section 80L upto Rs.3,000 are available with no TDS (tax deducted at source). However, this benefit has been withdrawn from the Assessment Year 2005-06.

Disadvantages

The inflation will decrease the real return on the security and the possibilities of higher interest rates erode the value of the bond.

 


Related Discussions:- Advantages and disadvantages of investing in gilts

Cost control strategies in organisations, 1. List the common elements of a ...

1. List the common elements of a submission for a major resource acquisition (purchase) 2. What is the difference between: A fixed asset and current asset? 3. If you worked i

Currency swap, How exchange of principal and interest in one currency? E...

How exchange of principal and interest in one currency? Expalin

Calculation of weighted average cost of capital, Calculation of weighted av...

Calculation of weighted average cost of capital (WACC) Market values Market value of equity = 5m × 4.50 = $22.5 million Market value of preference shares = 2.5m × .0762 =

Explain about the audit risk, Audit risk Obtain understanding of ac...

Audit risk Obtain understanding of accounting and internal control systems. Sufficient to plan audit and develop effective audit approach. Professional judgement to

Jit inventory control system primary recuirement, What are the primary requ...

What are the primary requirements for a successful JIT inventory control system? For a JIT system to be victorious the supplier must be willing and able to deliver materials im

Yield, Yield Yield represents the actual return on the investments. Dif...

Yield Yield represents the actual return on the investments. Different types of yield are discussed below: Coupon Yield: The fixed interest rate on a government security or

The visitors perceive to justify the renovation, Lincoln Park Zoo in Chicag...

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Addi

Stock price calculations, I need help working through this problem. What is...

I need help working through this problem. What is the stock price of Firm X when provided the following information? Beta – 1.42 MRP – 10% Rf – 3% G – 4% Dividend next period-

Enumerate the cash flow statement analysis, Cash flow statement analysis ...

Cash flow statement analysis Cash flow statement is a primary financial statement and shows cash generating ability of the organisation. Cash generated from operations can b

Calculate the ex-right stock price, DIY Inc. plans to raise $200,000 with a...

DIY Inc. plans to raise $200,000 with a right offering. The current stock price is $100 and there are 80,000 shares outstanding. a. If DIY sets the subscription price to be $80

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd