Q. Consider the following statements:

1. There is almost no speculation in the Government Securities (G-sec) market.
2. Investors in the G-sec market are predominantly institutions.

Which of the above statements is/are correct?
Answer: Both 1 and 2 are correct
Notes: Both statements are correct. The G-sec market is dominated by institutional investors like banks, insurance companies, and mutual funds, leading to minimal speculation. The market is over-the-counter and large in size, with negotiated transactions and low uncertainty regarding yields, which reduces speculative activity compared to other markets.