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Q83. 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:

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3✓ Correct

Detailed Solution

✓ Correct Answer: Option D

All three categories of entities can trade in Corporate Bonds and Government Securities (G-Secs) in India: 1. Insurance Companies: These are major institutional investors that invest heavily in both G-Secs and corporate bonds to meet their long-term liabilities and regulatory requirements.

2. Pension Funds: Similar to insurance companies, pension funds are significant institutional investors in debt markets, including G-Secs and corporate bonds, to ensure long-term returns for their beneficiaries.

3. Retail Investors: With initiatives like the RBI Retail Direct scheme, individual retail investors can now directly invest in G-Secs. They can also invest in corporate bonds through various online platforms and mutual funds.

Therefore, all three options are correct. This question is relevant to the Indian financial market structure, investment avenues, and government efforts to broaden participation in debt markets.

Current Affairs Link

Through Retail Direct scheme, retail investors can now buy and sell government securities.

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