Civil Services Prep

Prelims 2024 · Economy · Question 83

In India, which of the following can trade in Corporate Bonds and Government Securities?

  1. Insurance Companies
  2. Pension Funds
  3. Retail Investors.

Select the correct answer using the code given below:

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Answer

1, 2 and 3

1. Insurance Companies — Yes. Insurance companies are major institutional investors and are permitted to trade/invest in both government securities and corporate bonds.
Verdict: Correct.

2. Pension Funds — Yes. Pension funds such as EPFO/NPS-related funds can invest and trade in government securities and approved corporate debt instruments.
Verdict: Correct.

3. Retail Investors — Yes. Retail investors can participate in government securities (including through RBI Retail Direct) and can also buy/sell corporate bonds through exchanges/platforms.
Verdict: Correct.

Since 1, 2 and 3 can trade in corporate bonds and government securities, the correct answer is (d).

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