Question

    What happens if the market price of gold falls below the

    issue price of Sovereign Gold Bonds at the time of maturity?
    A Investors incur a loss Correct Answer Incorrect Answer
    B The government compensates the difference Correct Answer Incorrect Answer
    C Investors get the original issue price Correct Answer Incorrect Answer
    D Interest payments are increased to cover the loss Correct Answer Incorrect Answer
    E The maturity period is extended Correct Answer Incorrect Answer

    Solution

    At maturity, investors are paid the prevailing market price of gold. However, the principal repayment and interest are not affected by fluctuations in gold prices, providing a form of protection against loss in value.

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