1.

Indian Government Bond Yields are influenced by which of the following?1. Actions of the United States Federel Reserve2. Actions of the Reserve Bank of India3. Inflation and short-term interest ratesSelect the correct answer using the code given below.1. 1 and 2 only2. 2 only3. 3 only4. 1, 2 and 3

Answer» Correct Answer - Option 4 : 1, 2 and 3

The correct answer is 

  • A government bond is a debt instrument issued by the Central and State Governments of India.
  • A government bond in India is essentially a contract between the issuer and the investor, wherein the issuer guarantees interest earnings on the face value of bonds held by investors along with repayment of the principal value on a stipulated date.
  • Government Bonds India, fall under the broad category of government securities (G-Sec) and are primarily long term investment tools issued for periods ranging from 5 to 40 years. It can be issued by both the Central and State governments of India.
  • Bond yield is the return on the bond an investor will get by investing in a bond
  • Bond yield is inversely proportional to Bond price. As bond prices increase, bond yields fall.
  • Indian Government Bond Yields are influenced by:-
    • The monetary policy of the Reserve Bank of India.
    • The course of interest rates.
    • The fiscal position of the government and its borrowing programme. 
    • Global markets.
    • Economy. 
    • Inflation.
  • Hence all the there factors can influence Indian Government Bond Yields.


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