Gilt Edge Securities and Bank Deposits

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:08AM in AAT student discussion
<BR>Hiya everybody,<BR><BR>Anybody doing simulation 3 for Credit Cntrol. Lucent Ltd<BR><BR>What security procedures should be arranged for gilt-edged securites and bank deposits?<BR>What would the effect of any increase in base rate of both types of investment be?<BR><BR>Any help would be appreciated. Always get stuck on questions regarding gilt-edged securites!!!

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Gilt Edge Securities and Bank Deposits

    If I remeber this correctly. A raise in base rate would increase the amount of interest paid on a bank deposit , but guilt edged securities have a fixed rate of interest. This would mean that in order to make guilt edgeded securities appeal to a purchaser the selling price of the security would have to be adjusted (reduced) to give the purchaser the equivalent return on his/ her money.<BR><BR>Security for guilt edge securities involves storing the certificates safely .g. in a bank.

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