BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Backed by the government treasury .
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Convertible into the other types of saving deposits
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Stable in value
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Quickly & easily Marketable
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Detailed explanation-1: -Government securities are considered liquid because they are quickly and easily marketable.
Detailed explanation-2: -Government securities (g-secs) are bonds issued by the government. G-secs are structured like a loan. On maturity (end of loan term), the investors are paid the principal amount. In the case of long-term g-secs (maturity over 1 year), investors get interest payments in the form of coupon payments.
Detailed explanation-3: -As mentioned above, Relief/Savings Bonds are Government securities and they are issued in the form of Stock and BLA by RBI and in the form of BLA by the Agency banks.
Detailed explanation-4: -Generally, the government of India use these securities to fulfil temporary cash flow requirements. Dated Government securities are a unique type of securities because they either have fixed or a floating rate of interest also called the coupon rate.