WBCS.LIVE practice question

What does the term 'Gilt-Edged Market' strictly refer to in the Indian financial system?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. The market for highly volatile equity stocks.
  2. The market for foreign exchange derivatives.
  3. The market for corporate junk bonds.
  4. The market for government and semi-government securities.

Correct answer and explanation

Correct answer: The market for government and semi-government securities.

Explanation: āœ… Correct Answer: D) The market for government and semi-government securities. šŸ“š Explanation: In financial terminology, the 'Gilt-Edged Market' strictly refers to the highly secure market for buying and selling government and semi-government securities. Because these securities are issued and backed completely by the sovereign state (or RBI on its behalf), they carry zero risk of default, making them as safe as gold ("gilt").