Question

    Consider the following about Government Security

    (G-Sec): I. G-Secs carry practically no risk of default. II. These are called risk-free gilt-edged instruments. III. Gilt-edged securities are high-grade investment bonds offered by governments only Which of the above statement is/are not correct?
    A I only Correct Answer Incorrect Answer
    B II Only Correct Answer Incorrect Answer
    C III only Correct Answer Incorrect Answer
    D I and II Only Correct Answer Incorrect Answer
    E II and III only Correct Answer Incorrect Answer

    Solution

    G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments. Gilt-edged securities are high-grade investment bonds offered by governments and large corporations as a means of borrowing funds.

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