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Banking Term: Gilt Edged Securities

Find important banking term that is useful in upcoming banking exam.

Jan 13, 2015 12:45 IST
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Gilt Edged Securities are the high grade bonds that are issued by government or firm. These bonds are issued when organization has a strong record of consistent earnings and can be relied on to cover dividends and interest.

Government securities, also called the gilt edged securities or G-secs, are not only free from default risk but also provide reasonable returns and, therefore, offer the most suitable investment opportunity to provident funds.

Question

Which of the following statement is not true for Gilt Edged Securities?

a) Its a government security, very secure and highly liquid.

b) It is a claim on Government.

c) It guarantees only capital and not interest.

d) All of these

e) None of these

Ans. c

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