UPSC Prelims 2024 · Question 83 of 97
UPSC Prelims 2024 question on Corporate Bonds G Secs Traders
- ExamUPSC CSE
- Year2024
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicSecurity Market in India
- DifficultyMedium
- TypeDirect
In India, which of the following can trade in Corporate Bonds and Government Securities?
1. Insurance Companies
2. Pension Funds
3. Retail Investors
Select the correct answer using the code given below:
Show answer
Answer: D. 1, 2 and 3
Verdict
All three – Insurance Companies, Pension Funds and Retail Investors – can trade in Corporate Bonds and Government Securities → Option (d).
Analysis
A Government Security (G-Sec) is a tradeable instrument issued by the Central or State Governments acknowledging the Government's debt obligation.
Major players in the G-Secs and Corporate Bond market include commercial banks and Primary Dealers besides institutional investors like insurance companies. Other participants include co-operative banks, regional rural banks, mutual funds, provident and pension funds.
Through the Retail Direct Scheme, individual (retail) investors can now buy and sell government securities directly.