Consider the following statements:begin{enumerate}item The Reserve Bank of India (RBI) has said the investment limit in the inflation indexed bonds for individuals has been doubled to Rs 10 lakh.item Interest rates on the bonds are linked to Consumer Price Index (CPI).end{enumerate} Which of the statements given above is/are correct?

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Consider the following statements:

A	has said the investment limit in the inflation indexed bonds for individuals has been doubled to Rs 10 lakh.
B	.
C	1 only
D	1 and 2
E	2 only
F	Either 1 or 2

Explanation:

Detailed explanation-1: -The consumer price index (CPI) reflects the inflation people at large face and therefore, globally CPI or Retail Price Index (RPI) is used for inflation target by the Central Banks as well as for providing inflation protection in IIBs.

Detailed explanation-2: -Inflation bonds decoded A Reserve Bank of India (RBI) research paper from 2013 states that, “In developed debt markets, IIBs issued by the government are a popular debt instrument. These governments issue these bonds with an aim to: (a) Provide a new instrument to investors to hedge against inflation risk.

Detailed explanation-3: -Terms in this set (25) Which of the following statements about Treasury inflation-indexed bonds is not true? The interest payment rises when inflation occurs.

Detailed explanation-4: -With reference to the Indian economy, what are the advantages of “Inflation-indexed Bonds (IIBs)”? Government can reduce the coupon rates on its borrowing by way of IIBs. IIBs provide protection to investors from uncertainty regarding inflation. The interest received as well as capital gains on IIBs are not taxable.

There is 1 question to complete.