{"id":56413,"date":"2024-04-16T00:44:13","date_gmt":"2024-04-16T00:44:13","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=56413"},"modified":"2024-04-16T00:44:13","modified_gmt":"2024-04-16T00:44:13","slug":"bonds-or-debentures-issued-by-securitization-company-should-bear-interest-not-less-than","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/bonds-or-debentures-issued-by-securitization-company-should-bear-interest-not-less-than\/","title":{"rendered":"Bonds or debentures issued by Securitization company should bear interest not less than"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a97fd4eab767\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Bank Rate                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Prime Lending Rate                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    1.5% over the Bank Rate                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    1.5% over the Saving Rate                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>C. 1.5% over the Bank Rate<\/strong><\/p>\n<p>The Bank Rate is the interest rate at which the Reserve Bank of India lends money to commercial banks. The Prime Lending Rate is the interest rate at which commercial banks lend money to their most creditworthy customers. The Saving Rate is the interest rate that banks pay on savings accounts.<\/p>\n<p>Securitization companies issue bonds or debentures to raise money. These bonds or debentures are considered to be relatively risky investments, so they must offer a higher interest rate than other types of investments, such as government bonds. The Bank Rate is a good benchmark for the interest rate that securitization companies should offer on their bonds or debentures. By offering an interest rate that is 1.5% over the Bank Rate, securitization companies can attract investors who are looking for a higher return on their investment.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: The Bank Rate is the interest rate at which the <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> Reserve Bank of India lends money to commercial banks. It is the lowest interest rate at which banks can borrow money. Therefore, it is not a good benchmark for the interest rate that securitization companies should offer on their bonds or debentures.<\/li>\n<li>Option B: The Prime Lending Rate is the interest rate at which commercial banks lend money to their most creditworthy customers. It is a higher interest rate than the Bank Rate. However, it is still not a good benchmark for the interest rate that securitization companies should offer on their bonds or debentures. This is because securitization companies are considered to be riskier borrowers than commercial banks.<\/li>\n<li>Option C: The interest rate that securitization companies should offer on their bonds or debentures should be at least 1.5% higher than the Bank Rate. This is because securitization companies are considered to be riskier borrowers than commercial banks. Therefore, they must offer a higher interest rate to attract investors.<\/li>\n<li>Option D: The Saving Rate is the interest rate that banks pay on savings accounts. It is a lower interest rate than the Bank Rate or the Prime Lending Rate. Therefore, it is not a good benchmark for the interest rate that securitization companies should offer on their bonds or debentures.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bonds or debentures issued by Securitization company should bear interest not less than<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/bonds-or-debentures-issued-by-securitization-company-should-bear-interest-not-less-than\/\" \/>\n<meta property=\"og:locale\" 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