With reference to the corporate bond index derivatives, consider the following statements: 1. These are financial instruments whose value is derived from a specific corporate bond index composed of high-quality corporate debt securities. 2. SEBI allows futures trading on corporate bond indices in India. Which of the statements given above is/are correct? |ForumIAS

Q. With reference to the corporate bond index derivatives, consider the following statements:
1.These are financial instruments whose value is derived from a specific corporate bond index composed of high-quality corporate debt securities.
2.SEBI allows futures trading on corporate bond indices in India.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C

Notes:

Explanation: Both are correct

Statement 1 is correct: Corporate Bond Index Derivatives are financial instruments whose value is derived from a specific corporate bond index composed of high-quality corporate debt securities (rated AA+ and above).

Statement 2 is correct: The Securities and Exchange Board of India (SEBI) has framed regulations to allow futures trading on corporate bond indices since 2023, but these products have not gained significant traction yet.

Source: BL

Post-Mains Strategy Session by Mr. Ayush Sinha | ForumIAS