Finance and securities market terminology: What does the term 'gilt-edged market' mean? In Indian and global finance, ‘‘gilt-edged’’ denotes the safest, high-grade, government-backed debt securities segment of the capital market. Choose the correct option.
General Knowledge
Indian Economy
Difficulty: Easy
Choose an option
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AMarket for government and other top-rated fixed-income securities
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BMarket for precious metals like gold and silver
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CEquity market for blue-chip shares only
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DForeign exchange market for hard currencies
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ECommodity futures market for agricultural goods
Answer
Correct Answer: Market for government and other top-rated fixed-income securities
Explanation
Given concept
- Gilt-edged originally referred to British government bonds (“gilts”). Over time, it has come to mean the market in which the safest, sovereign or highest-rated debt instruments are traded.
- In India, this usage aligns with government securities (G-secs) and other AAA-grade bonds, i.e., the low-risk fixed-income segment.
Why the other options are incorrectPrecious metals (option B) concern bullion, not securities.Blue-chip equities (option C) are stocks, not gilt-edged debt.Forex (option D) is currency trading, not bond markets.Commodity futures (option E) are derivatives on goods, not sovereign/AAA bonds.
Key takeawayA gilt-edged market is the segment dealing in government and other top-quality fixed-income securities characterized by very low default risk and high credit standing.
Final AnswerMarket for government and other top-rated fixed-income securities