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

Hedging strategy, Crown Co. is expecting to receive 100,000 British pounds ...

Crown Co. is expecting to receive 100,000 British pounds in one year. Crown expects the spot rate of British pound to be $1.49 in a year, so it decides to avoid exchange rate risk

Explain contingent exposure, Explain contingent exposure and define the adv...

Explain contingent exposure and define the advantages of using currency options to manage this type of currency exposure. Answer: Companies may come across a state where they m

Briefly explain suppliers and customers, Suppliers and customers Suppli...

Suppliers and customers Suppliers as well as customers are external stakeholders with their own set of objectives profit for the supplier and possibly customer satisfaction wit

Activity-based management - abm, A procedure that invented in the 1980s for...

A procedure that invented in the 1980s for evaluating the processes of a business to find strengths and weaknesses. Specially, activity-based management finds out areas where a bus

Assignment, Imagine you have been allocated $100,000 which is to be investe...

Imagine you have been allocated $100,000 which is to be invested in 8 companies listed on the Australian Stock Exchange (ASX). You are required to have a balanced portfolio betwee

Over the counter (otc), OTC refers to financial securities whose sale and p...

OTC refers to financial securities whose sale and purchase are not conducted over a stock exchange.

Debt and coverage ratios, The ability of a firm to satisfy its debt o...

The ability of a firm to satisfy its debt obligations can be assessed using three sets of ratios: Short-term solvency ratios Capitalization

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

Capital asset pricing model (capm), Capital Asset Pricing Model (CAPM) ...

Capital Asset Pricing Model (CAPM)   Capital Asset Pricing Model (CAPM) is a model which utilizes the measure of systematic risk, 'B' to price assets. The expected rate of r

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