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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?

A I only Correct Answer Incorrect Answer
B II only Correct Answer Incorrect Answer
C III only Correct Answer Incorrect Answer
D I and III only Correct Answer Incorrect Answer
E II and III only Correct Answer Incorrect Answer

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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