Attempt this previous-year question. The correct option stays hidden until you choose.
With reference to the Indian economy, what are the advantages of "Inflation-Indexed Bonds (IIBs)"?
1. Government can reduce the coupon rates on its borrowing by way of IIBs.
2. IIBs provide protection to the investors from uncertainty regarding inflation.
3. The interest received as well as capital gains on IIBs are not taxable.
Which of the statements given above are correct ?
Pick an option to check yourself.
• Correct Answer: A
• IIBs let government offer lower coupon rates since investors are protected against inflation erosion.
• Principal and interest adjust to CPI, removing inflation uncertainty.
• Interest and capital gains on IIBs are taxable, not exempt.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.
GyanGram