JAIIB · IEIFS

FIXED INCOME MARKETS

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.

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Q

What is a fixed income market?

A

A fixed income market is a financial market where debt instruments that pay periodic fixed interest (coupon) payments and return principal at maturity are issued and traded. Examples include government bonds, corporate debentures, and treasury bills.

Q

What is the face value (par value) of a bond?

A

The nominal value at which a bond is redeemed at maturity.

Q

Which regulatory body oversees the government securities market in India?

A

The Reserve Bank of India (RBI) regulates and manages the government securities market in India, acting as the debt manager for the Central and State Governments.

Q

What is a coupon rate on a fixed income security?

A

Annual interest rate paid on the bond's face value.

Q

What is a Government Security (G-Sec) in the Indian context?

A

A Government Security is a tradeable instrument issued by the Central Government or State Governments acknowledging their debt obligation. It can be short-term (Treasury Bills) or long-term (dated securities/bonds).

Q

What does 'fixed income' mean in the context of financial markets?

A

Instruments that provide predetermined, regular interest payments to investors.

Q

What are Treasury Bills (T-Bills) and what maturities are available in India?

A

Treasury Bills are short-term money market instruments issued by the Government of India with maturities of 91 days, 182 days, and 364 days. They are issued at a discount and redeemed at face value.

Q

What is the difference between money market and capital market in fixed income?

A

Money market is for short-term instruments; capital market for long-term instruments.

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