Answer to Question #161316 in Management for Prabhdeep

Question #161316

Explain the role of investment in government securities?(Please give atleast 10 points for role)


1
Expert's answer
2021-02-05T05:10:01-0500
  1. Government securities are debt instruments that provide the government with funds to aid development.
  2. Investing in government securities creates a stable and consistent source of income for individuals.
  3. Buying government bonds has lower risk as compared to other invest opportunities. They are considered risk-free due to the government's ability to develop capital.
  4. Interest earned through government securities is not subject to tax.
  5. The bonds are flexible they have different maturity rates to accommodate different people.
  6. Securities act as a benchmark for pricing corporate papers of varying maturities.
  7. Useful in implements the fiscal policy of the government
  8. A government security gives the highest variety of collateral for borrowing against their pledge.
  9. They bringing about an effective and reliable transmission channels for the use of indirect instruments of financial control.
  10. Enables the government to pay off debt.

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