Assertion (A) : Investors in capital market seem to be inclined for fixed income securities. Reason (R) : Debt instruments now have active secondary market. Codes :
Assertion (A) is correct, but Reason (R) is incorrect.
Assertion (A): around 2014 Indian household savings flowed heavily into bank deposits, small savings and other fixed-return instruments, and retail participation in equities was low after the market fall of 2008. Investors appeared inclined towards fixed income securities. So (A) is correct.
Reason (R): India's corporate debt market had a primary market dominated by private placements, but the secondary market was thin and illiquid. Most bonds were held to maturity by banks and institutions, and committees such as the R.H. Patil Committee (2005) highlighted the absence of active secondary trading. So (R) is incorrect.
Since (R) is incorrect, it cannot explain (A); the preference for fixed income came from safety and assured returns, not from liquidity in debt trading.
Hence, Assertion (A) is correct, but Reason (R) is incorrect.
Similar Questions
In India, NIFTY and SENSEX are calculated on the basis of :
The world’s first electronic stock market is :
ADRs’ and GDRs’ are an excellent means of investment to invest in India for
Statement I : FIIs do not invest in unlisted entities. They participate only through stock exchanges.
Statement II : FIIs cannot invest at the time of initial allotment.
Select the correct code :
Codes :
In which of the following Stock Exchanges the GDR’s are listed ?
(i) London Stock Exchange
(ii) New-York Stock Exchange
(iii) Luxembourg Stock Exchange
(iv) Bombay Stock Exchange
(v) Singapore Stock Exchange
(vi) Hong Kong Exchange
Identify the correct combination :
Underwriters of the security issues are required to
Match the various stock exchanges in List – I with the years of their establishment in List – II as follows and suggest the correct code :
List – I List – II a. National Stock Exchange (NSE) i. 1875 b. MCX Stock Exchange (MCX-SX) ii. 1992 c. Bombay Stock Exchange (BSE) iii. 2000 d. Interconnected Stock Exchange of India (ISEI) iv. 2008 Codes :
a b c d
Secondary market intermediaries for corporate securities in India are
I. Investors
II. Jobbers
III. Brokers and sub-brokers
IV. Portfolio consultants
Codes :
Examine the following statements and choose the correct answer :
Statement - I : FIIs do not invest in unlisted securities. They participate only through Stock Exchanges.
Statement - II : FIIs cannot invest at the time of initial allotment.
Codes :
Important Questions from Capital Market
The following two statements relate to receivables management. Choose the correct code for the statements being correct or incorrect.
Statement I: The major controllable decision variables for deciding the credit policy are the credit standards and analysis and the credit terms only.
Statement II : Factoring is a popular mechanism of managing, financing and collecting receivables.
The following two statements relate to financial derivatives. Choose the correct code for the statements being correct or incorrect.
Statement I: When an option is allowed to be exercised only on the maturity date, it is called an American option.
Statement II : If the option holder does not lose or gain whether he exercises his option or buys or sells the asset from the market, the option is said to be at-the-money.
The given statements are related to financial derivatives. Choose the correct code for the statements being correct or incorrect.
Statement I: A speculator will gain, if he sells foreign currency under a forward contract, when the spot price is higher than the forward price.
Statement II : In currency futures, intra currency spread exists when a speculator buys/sells the same currency for two delivery dates.
Indicate the correct code for the following two statements of Assertion (A) and Reasoning (R):
Assertion (A): Investors in the capital market now have a higher inclination for investment in debentures.
Reasoning (R): Debentures have active secondary markets now.
Authorised capital of a company is Rs. 5 lacs; 40% of it is paid up. Loss incurred during the year is Rs. 50,000. Accumulated loss carried from last year is Rs. 2 lac. The company has a Tangible Net Worth of:
