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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Comparison of Products Across Categories

Which of the following products is most suitable for a client who wants a regular, predictable income stream with capital protection from a sovereign-backed issuer, and is willing to accept a lower return?

Government of India securities held to maturity best suit this client. They are backed by the sovereign, pay fixed periodic coupons and return principal at maturity, giving predictable income and capital protection, though at lower returns than equity, corporate bonds or commodity products.

  1. ASmall-cap equity mutual fund
  2. BGovernment of India securities held to maturityCorrect
  3. CUnlisted corporate bonds
  4. DCommodity-linked ETF

Explanation

Government securities carry sovereign credit backing and pay fixed coupons, so held to maturity they give predictable income with capital protection. The other options carry higher credit, market or price risk.

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