Government bonds, Financial Management

Assignment Help:

Government securities are the most important and unique financial instruments in the financial markets of any economy. Government of India Securities (GOI Sec) include debt obligations of the central government, state governments and other financial institutions owned by central and state governments. As the repayment of principal as well as interest is secured by the government or its guarantee, these instruments are usually referred to as 'Gilt-Edged Securities'. Literally, gilt means gold, and therefore, a gilt-edged security implies 'security of the best quality'. As government securities are loans floated by the government, they become a part of the national debt of the country and the payment of interest on them and also their repayment has a first charge on a nation's purse. Hence, they are absolutely secured financial instruments, guaranting the capital as well as the interest income. Central government securities are considered to be the safest claims amongst stocks of local authorities and industrial debentures, etc. Thus, investors prefer to invest in these securities though the rate of interest is relatively low, when compared to other money market instruments. In the absence of default risk, they are regarded as risk-free investments.


Related Discussions:- Government bonds

Explain the procedure for cost benefit analysis, Question 1: i) Pe...

Question 1: i) Performance budgeting is the best budgeting system. Discuss. ii) Why there is a need for implementing MTEF in the Mauritian Public Sector? Questi

Interpretations of duration, Duration is often referred to as the app...

Duration is often referred to as the approximate percentage change in the price for a 1% change in rates. Now, we will see some other definitions or interpretatio

George thomas, which type of financing is appropriate to each firm

which type of financing is appropriate to each firm

Illustrate the term structure of interest rates, Illustrate the term struct...

Illustrate the term structure of interest rates? The term structure of interest rates: The term to maturity affects the interest rate. Bonds along with identical risk may

Type of hedge funds, What are the Types of Hedge Funds? Please provide me r...

What are the Types of Hedge Funds? Please provide me report on Types of Hedge Funds.

Define defined benefit and defined contribution pension plan, Compare and c...

Compare and contrast a defined benefit and a defined contribution pension plan. In a defined benefit plan, retirement benefits are defined by a formula that generally considers t

Agency Problem, What is the potential of having agency problems

What is the potential of having agency problems

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

#discuss the applicability of operating cycle to poultry business.

Genesis Energy Capital Plan Report, Calculate the firm’s WACC. Prepare and ...

Calculate the firm’s WACC. Prepare and analyze each planned capital expenditure. Evaluate, rank, and recommend the capital expenditures according to beneficial value to the organiz

Buy side analyst, How to Industry analysis and finally stock picking from B...

How to Industry analysis and finally stock picking from Buy-side perspective

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