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 However, this benefit has been withdrawn from the Assessment Year 2005-06.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

Rating scale, Rating denote an issuer's ability to respond to adverse...

Rating denote an issuer's ability to respond to adverse changes in circumstances and economic conditions. The rating scale is generally differentiated into variou

Price Earnings, what is the relationship between industry pe and comapny''s...

what is the relationship between industry pe and comapny''s pe?

Federal reserve system forecast, A. Joe wants to invest in Nebraska Municip...

A. Joe wants to invest in Nebraska Municipal 6% GOB that are rated AA. Joe's tax rate is usually between 28% .  GE plans to sell AA rated 8% coupon bonds. Compute Joe's after-tax i

Payout policy, mini-case chapter 15:payout policy Megginson, Smart, Graham

mini-case chapter 15:payout policy Megginson, Smart, Graham

Explains the reason for the negative synergistic gains, What can be the rea...

What can be the reason for the negative synergistic gains for British acquisitions of U.S. firms? Negative synergies for British acquisitions of U.S. firms (united state firms) m

Distinguish between a credit card and a debit card, QUESTION (a) What a...

QUESTION (a) What are the main benefits of E-Banking to customers and banking institutions? (b) Internet Banking products and services are of two primary types, informationa

OPERATING CYCLE, #discuss the applicability of operating cycle to poultry b...

#discuss the applicability of operating cycle to poultry business.

#title.OPERATING CYCLE, DISCUSS THE APPLICABILITY OF OPERATING CYCLE IN VEG...

DISCUSS THE APPLICABILITY OF OPERATING CYCLE IN VEGETABLE GROWING.

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