NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities
A client holds a 91-day Treasury Bill of face value Rs 5,00,000 bought at Rs 4,90,000 and holds it to maturity. Which is the correct amount credited on redemption?
The client receives Rs 5,00,000 on redemption. Treasury Bills are redeemed at face value, and the Rs 10,000 difference from the Rs 4,90,000 purchase price is the return. There is no coupon on a T-Bill.
- ARs 4,90,000
- BRs 5,10,000
- CRs 5,00,000Correct
- DRs 5,00,000 plus accrued coupon
Explanation
T-Bills are redeemed at face value regardless of purchase price. The Rs 10,000 gain is the discount earned, not an additional payment. No coupon accrues on a T-Bill, so adding coupon is wrong, and the purchase price is not repaid.
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