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

Inflation and exchange rates, Inflation and Exchange Rates To understan...

Inflation and Exchange Rates To understand the impact of inflation, several terms should be understood. For example, inflation from the investors' standpoint must be clearly de

Scenario analysis for a portfolio manager, A portfolio manager would ...

A portfolio manager would never prefer to make investment decision based on just one set of assumptions. Instead, he would evaluate the outcome of the selected st

How does the net present value relate to value of the firm, How does the ne...

How does the net present value relate to the value of the firm? The net present value is the dollar amount of the amend to the value of the firm if the project under considerat

The us pension fund system, The US Pension Fund System The US corporate...

The US Pension Fund System The US corporate pension system has matured along with the country's demographic cycle. It consists of both defined benefit plans and defined contrib

Role of sponsor, Role of Sponsor In the establishment of mutual fund tr...

Role of Sponsor In the establishment of mutual fund trust, the main role is played by the sponsors. Both the trustees and the fund managers or the asset management company have

Business venture, Project Plan for my new business venture is attached) ...

Project Plan for my new business venture is attached) 1.     Your task is to take a look at every of the operational areas of the intended business, and verify  what financial i

Calculate the present price of the stock, Company Z has just been organized...

Company Z has just been organized. It is expected to experience zero growth next year and grow at a 10% rate in year 2.  Beginning in the third year the company should attain a 5%

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