On what basis are government securities awarded atthe auction average yield?
A.
Schedule III banks
B.
Open market
C.
Non-competitive lender.
D.
Dealer market system
The Answer Is:
C
This question includes an explanation.
Explanation:
Government securities are awarded at auction using both competitive and non-competitive bidding. In a non-competitive bid, the participants (such as smaller investors or institutions) agree to accept the average yield determined by the competitive bidding process. This mechanism ensures equitable access to government securities without the need to compete directly on yield, promoting broad participation in the market​​.
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