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

Question

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

Answer 1

(d) 1, 2 and 3

Explanation:

• Insurance Companies: Insurance companies are allowed to invest and trade in both corporate bonds and government securities as part of their investment portfolios. They use these investments to meet their long-term liabilities and regulatory requirements.

• Pension Funds: Pension funds also invest in a variety of securities, including corporate bonds and government securities. These investments help pension funds manage the long-term liabilities associated with providing retirement benefits to their members.

• Retail Investors: Retail investors are allowed to trade in both corporate bonds and government securities. They can participate in the government securities market through retail debt schemes and in the corporate bond market through stock exchanges and mutual funds.

Therefore, all three types of investors listed can trade in corporate bonds and government securities in India.