Question:
A Government Security (G-Sec)
A Government Security (G-Sec)
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Government Securities (G-Secs) are low-risk debt instruments issued by the government, often considered "gilt-edged" due to their low default risk.
Updated On: Dec 19, 2025
- is a tradeable instrument issued by the Central Government
- is a tradeable instrument issued by State Governments
- can have maturity of only more than one year
- cannot be considered as ‘gilt-edged’ instrument
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The Correct Option is A, B
Solution and Explanation
Step 1: Understand what a Government Security (G-Sec) is.
A Government Security (G-Sec) is a debt instrument issued by the government to raise funds for various expenditures. It can be issued by the Central Government or State Governments, but the term "G-Sec" typically refers to securities issued by the Central Government.
Step 2: Evaluate the options.
- (A) is a tradeable instrument issued by the Central Government: This is correct. G-Secs are generally issued by the Central Government and are tradeable.
- (B) is a tradeable instrument issued by State Governments: This is incorrect, as State Governments issue State Development Loans (SDLs), not G-Secs.
- (C) can have maturity of only more than one year: This is not necessarily true, as G-Secs can have varying maturities, including short-term and long-term securities.
- (D) cannot be considered as a ‘gilt-edged’ instrument: This is incorrect, as G-Secs are considered "gilt-edged" instruments due to their low-risk nature.
Step 3: Conclusion.
The correct answer is (A). Final Answer: (A) is a tradeable instrument issued by the Central Government
A Government Security (G-Sec) is a debt instrument issued by the government to raise funds for various expenditures. It can be issued by the Central Government or State Governments, but the term "G-Sec" typically refers to securities issued by the Central Government.
Step 2: Evaluate the options.
- (A) is a tradeable instrument issued by the Central Government: This is correct. G-Secs are generally issued by the Central Government and are tradeable.
- (B) is a tradeable instrument issued by State Governments: This is incorrect, as State Governments issue State Development Loans (SDLs), not G-Secs.
- (C) can have maturity of only more than one year: This is not necessarily true, as G-Secs can have varying maturities, including short-term and long-term securities.
- (D) cannot be considered as a ‘gilt-edged’ instrument: This is incorrect, as G-Secs are considered "gilt-edged" instruments due to their low-risk nature.
Step 3: Conclusion.
The correct answer is (A). Final Answer: (A) is a tradeable instrument issued by the Central Government
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