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What backs Government Securities, making them virtually risk-free?

"Sovereign Guarantee"

"Corporate Guarantee"

"Bank Guarantee"

"Mutual Fund Guarantee"

Qn. 2 / 10

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What distinguishes Treasury Bills (T-bills) from Bonds in terms of interest?

"T-bills carry higher interest rates"

"T-bills are issued at a discount and redeemed at par value, without an interest component"

"Bonds offer semi-annual interest payments"

"Bonds have fixed interest rates, while T-bill rates fluctuate"

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How is the yield of a T-bill calculated?

"Yield = [Discount Value]/[Bond Price] * [365/number of days to maturity]"

"Yield = [Par Value]/[Discount Value] * [number of days to maturity/365]"

"Yield = [Interest Payment]/[Bond Price] * [365/number of days to maturity]"

"Yield = [Face Value]/[Market Price] * [number of days to maturity/365]"

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What happens to a T-bill upon maturity?

"It is automatically renewed for another term"

"It is transferred to a secondary market"

"It is extinguished, and the par value is credited to the investor's bank account"

"It is converted into a bond"

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How frequently are interest payments made on bonds?

"Annually"

"Quarterly"

"Semi-annually"

"Monthly"

Qn. 6 / 10

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What does the symbol '740GS2035A' represent for a government security?

"7.40% annualized interest, Government Securities, maturity in 2035, fresh issue"

"7.40% semi-annual interest, State Development Loan, maturity in 2035, re-issue"

"7.40% annualized interest, Corporate Bond, maturity in 2035, fresh issue"

"7.40% semi-annual interest, Municipal Bond, maturity in 2035, re-issue"

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What is the minimum investment amount for retail investors in G-Sec bonds/T-bills?

"Rs. 5 Crore"

"Rs. 1 Crore"

"Rs. 1 Lakh"

"Rs. 10,000"

Qn. 8 / 10

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What is the term for the process of determining the price of bonds through bids placed by banks and financial institutions?

"Secondary market trading"

"Auction process"

"Yield to maturity calculation"

"Floatation"

Qn. 9 / 10

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What is the key difference between Implicit Sovereign Guarantee and Explicit Sovereign Guarantee in the context of SDLs?

"Implicit Sovereign Guarantee implies a higher risk weight compared to Explicit Sovereign Guarantee"

"Explicit Sovereign Guarantee implies a higher risk weight compared to Implicit Sovereign Guarantee"

"Implicit Sovereign Guarantee applies to Central Government Securities, while Explicit Sovereign Guarantee applies to SDLs"

"Explicit Sovereign Guarantee applies to Central Government Securities, while Implicit Sovereign Guarantee applies to SDLs"

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How are capital gains from bonds taxed?

"Taxed as per the applicable income tax slab rate, regardless of holding period"

"Taxed as long-term capital gains if held for more than 3 years, otherwise as short-term capital gains"

"Taxed as short-term capital gains if held for more than 3 years, otherwise as long-term capital gains"

"Exempt from capital gains tax"