Question
Consider the following statements about Government Securities:
I. The g-sec market is dominated by institutional investors such as banks, mutual funds, and insurance companies.
II. These entities trade in lot sizes of Rs. 10 crore or more.
III. There is no liquidity in the secondary market for small investors who would want to trade in smaller lot sizes. Which of the statements above is/are not correct?
Solution
Statement I is correct -: The g-sec market is dominated by institutional investors such as banks, mutual funds, and insurance companies. Statement II is not correct -: These entities trade in lot sizes of Rs. 5 crore or more. Statement III is correct -: There is no liquidity in the secondary market for small investors who would want to trade in smaller lot sizes.
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