Skip to content

NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market

A mutual fund sells units of a liquid scheme to an investor, and also invests part of the corpus in treasury bills. Which statement correctly describes the treasury bills held by the fund?

Treasury bills are money market instruments issued by the Government of India with maturity of up to one year, namely 91, 182 or 364 days. They are issued at a discount and redeemed at face value, so they are not equity, long bonds or derivatives.

  1. AThey are equity instruments representing ownership in the government
  2. BThey are money market instruments issued by the Government of India with maturity of up to one yearCorrect
  3. CThey are long-term bonds with maturity above ten years
  4. DThey are derivative contracts based on interest rates

Explanation

Treasury bills are short-term government securities issued at a discount with maturities of 91, 182 or 364 days, so they are money market instruments. They are not equity, not long-term bonds and not derivatives.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to the Securities Market shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to the Securities MarketFree diagnostic mock

More Introduction to the Securities Market questions