Multiple choice

What is the main attribute of a Gilt-Edged stock?

  1. Bonds issued by the government whose likelihood of default is zero

  2. A stock backed by gold.

  3. Stocks which are linked to the inflation rate

  4. Stocks doing well in the capital market
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A Correct answer
Explanation

Gilt-edged stocks are high-quality government bonds with minimal default risk, specifically referring to British government securities (gilts). The term 'gilt-edged' signifies the highest credit quality and safety, analogous to gilt or gold-edged certificates.

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