Advantages and disadvantages of investing in gilts, Financial Management

Advantages and Disadvantages of Investing in Gilts

Advantages

As the security is issued by the GOI, it has a minimal default risk.

Investors have the opportunity to invest in very long-term debt sometimes up to 20 years because of the long maturity periods.

Almost all issues by the government have adequate liquidity except for a few. With the primary dealer authorized to deal in the buying and selling, he can take care of the liquidity.

 

Tax benefits

Tax benefits under Section 80L upto Rs.3,000 are available with no TDS (tax deducted at source). However, this benefit has been withdrawn from the Assessment Year 2005-06.

Disadvantages

The inflation will decrease the real return on the security and the possibilities of higher interest rates erode the value of the bond.

 

Posted Date: 9/10/2012 7:35:51 AM | Location : United States







Related Discussions:- Advantages and disadvantages of investing in gilts, Assignment Help, Ask Question on Advantages and disadvantages of investing in gilts, Get Answer, Expert's Help, Advantages and disadvantages of investing in gilts Discussions

Write discussion on Advantages and disadvantages of investing in gilts
Your posts are moderated
Related Questions
How to compare minimax and maximin with figures and commentary ?

What is the difference between economic profit and producer surplus? When economic profit is the difference among total revenue and total cost, producer surplus is the variatio

Illustrate the term quality of benefits It is clear from Table that total returns associated with two alternatives are identical in a normal situation but range of variati

Question 1: Give an account of the role of governmental bodies and officials in the making of public policies. Question 2: What do you understand by the term "Governmen


Determine about the synergistic effect When two or more companies join together there must be a synergistic effect. Synergy is when 2 + 2 = 5. Net present value of the two comp

Q. Calculate the optimum amount of funds to transfer? The Baumol model is derived from the EOQ model and is able to be applied in situations where there is a constant demand fo

LKL PLC Project VZ (a) Cash Flow budget and NPV WORKINGS

Q. What is the requirement of Working Capital? Ans. Meaning of Working Capital: - Working capital management is a significant aspect of financial management. In business money

Jessica is given the opportunity to invest $5,000 now and receive $5,700 at the end of one year. However, she could only invest $1,000 of her own money and would need to borrow the