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?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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