Government Securities Multiple Choice Questions
1. What is the underlying Collateral in repo transaction?
- Securities
- Gold
- Property
- Stock of Top 10 NSE listed Companies
Answer: 1
A repurchase agreement (repo) is a two-legged transaction that resembles a collateralised loan. A borrower of cash sells securities (the collateral) to the lender and agrees to buy them back later at a pre-specified price.
- SEBI
- RBI
- CCIL
- NSDL
Answer: 3
The CBLO is a money market instrument designed to meet the borrowing and lending needs of banks and financial institutions, MFs, NBFCs and corporates. The borrowing and lending of Collateralised Borrowing & Lending Obligations are collateralized which means they are secured using G-Sec or T-Bills. For added transparency, trades are screen based with CCIL, which is a central counter party
- 1 day
- 7 days
- 30 days
- 1 year
Answer: 4
CBLO is a lending and borrowing instrument issued in an electronic book entry form, for a maturity period ranging from one day to one year. Borrowers and lenders carry out transactions on the Clearing Corporation of India platform
- RBI
- FIMMDA
- SEBI
- AMFI
Answer: 2
Handbook of Market Practices is published by Fixed Income Money Market and Derivatives Association of India (FIMMDA)
- Dated securities
- Treasury bills
- State Development Loans
- Certificate of Deposits
Answer: 4
Government Securities are debt instruments issued by the government to borrow money. They are issued in the form of:
- Treasury Bills (T-Bills): T-Bills are are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day.
- Government Bonds or Dated Securities: Dated G-Secs are securities which carry a fixed or floating coupon (interest rate) which is paid on the face value, on half-yearly basis. Generally, the tenor of dated securities ranges from 5 years to 40 years.
- State Development Loans (SDL): SDLs are dated securities issued by state Governments to raise loans from the market
Certificate of Deposit is not a type of government security. Certificate of Deposit is a type of money market instrument issued against the funds deposited by an investor with a bank in a dematerialized form for a specific period of time
- To finance the government expenditure and managing cash mismatch of the government
- To decrease the fiscal deficit of government
- To improve cash flow in market
- None of the Above
Answer: 1
Government securities are usually issued to raise funds for government expenditures.
- Nostro Account
- Vostro Account
- Subsidiary General Ledger (SGL)
- Escrow Account
Answer: 3
Government Securities are generally held in Subsidiary General Ledger (SGL) accounts held with the RBI. In case entities do not have a direct account with RBI, they may open a Constituent SGL account with banks and Primary Dealers or convert them into dematerialized form in demat accounts maintained with the Depository Participants of NSDL.
- Rs 5000
- Rs 10000
- Rs 20000
- Rs 25000
Answer: 2
The minimum amount for bidding is Rs 10,000 (face value) and thereafter in multiples in Rs 10,000 as hitherto. In the auctions of GoI dated securities, the retail investors can make a single bid for an amount not more than Rupees Two crore (face value) per security per auction.
- G-sec
- T-bill
- SDL
- Commercial Papers
Answer: 4
In August 2005, RBI introduced an anonymous screen-based order matching module called NDS-OM. This is an order driven electronic system, where the participants can trade anonymously by placing their orders on the system or accepting the orders already placed by other participants. Anonymity ensures a level playing field for various categories of participants. NDS-OM is operated by the CCIL on behalf of the RBI.
- BBB
- BB
- C
- A
Answer: 1
The Corporate bonds with rating of BBB are generally considered as investment grade bonds.