Multiple choice

What is a gilt-edged stock?

  1. A stock backed by gold.

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

  3. Stocks which are linked to the inflation rate.

  4. Stocks doing well in the capital market.

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Gilt-edged stocks (or gilts) are bonds issued by governments, particularly associated with the UK. They are called 'gilt-edged' because of their high reliability and minimal default risk, being backed by the government's creditworthiness.

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