NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities
Which of the following is true about the face value and interest payment of a typical fixed-rate Government of India dated security held in a demat account?
A typical fixed-rate dated Government security pays coupon half-yearly, calculated on its face value, with principal repaid at maturity. It does not pay interest monthly on market value or only at maturity.
- ACoupon is paid half-yearly on the face valueCorrect
- BCoupon is paid only at maturity along with principal
- CCoupon is paid monthly on market value
- DCoupon is paid annually on the issue price
Explanation
Dated G-Secs with fixed coupons pay interest half-yearly, computed on the face value. Payment is not at maturity only, not monthly, and not based on market value or issue price.
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