25.Capital Market (Part - 4) Flashcards
What is a debenture?
A debenture is a type of debt instrument that provides a fixed income security. It is issued by corporations to raise funds from the market.
Who issues debentures?
Corporations issue debentures to raise funds from the market.
What is the relationship between the price and interest rate of a debt instrument in the debt market?
In the debt market, there is a negative relationship between the price and interest rate of a debt instrument.
What is the term used to describe a negative inflation rate during a recession?
Deflation is the term used to describe a negative inflation rate during a recession.
What is the objective of increasing investment during a recession?
The objective of increasing investment during a recession is to revive the investment cycle in the economy.
How can the Central Bank stimulate investment during a recession?
The Central Bank can stimulate investment during a recession by aggressively buying government securities, which increases the inflow of money into the economy.
What is the effective interest rate?
The effective interest rate, also known as the effective annual interest rate, is the real return on a savings account or any interest-paying investment when the effects of compounding over time are taken into account.
What does the effective interest rate reflect?
The effective interest rate reflects the actual percentage rate of interest owed on a loan, credit card, or other debt.
When was the introduction of Infrastructure Investment Funds in India?
Infrastructure Investment Funds were introduced in India in 2011-12.
What is the main objective of Infrastructure Investment Funds?
The main objective of Infrastructure Investment Funds is to make funds available for infrastructure purposes.
Which regulatory bodies provide rules for Infrastructure Investment Funds in India?
The rules for Infrastructure Investment Funds are provided by both the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
What is Quantitative Easing (QE)?
Quantitative Easing is a process where the central bank purchases existing government bonds to inject money directly into the financial system.
When is Quantitative Easing typically used?
Quantitative Easing is typically used as a last resort to stimulate spending in the economy when traditional monetary policy measures, such as interest rate adjustments, are ineffective.
Which central bank initiated the first major Quantitative Easing program?
The Bank of Japan is regarded as the first advanced economy to implement a major Quantitative Easing program.
How does Quantitative Easing work?
Quantitative Easing works by raising asset prices, starting with government bonds, and stimulating spending throughout the economy. This boosts bank assets, encourages lending, and creates a positive wealth effect for asset holders.
