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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Investing in Fixed Income Securities (NISM XXI-A)

Which of the following Indian debt instruments is issued by the Reserve Bank of India on behalf of the Government of India to meet short-term funding needs, with a maturity of up to one year and issued at a discount?

Treasury bills are the correct answer. They are short-term government money market instruments with maturities up to 364 days, issued at a discount to face value and redeemed at par. Dated securities pay coupons for longer tenors, while CDs come from banks.

  1. ATreasury billsCorrect
  2. BDated government securities
  3. CCertificates of deposit
  4. DState development loans

Explanation

Treasury bills are zero-coupon short-term government instruments with maturities of 91, 182 and 364 days, issued at a discount and redeemed at face value. Dated securities have longer maturities and pay coupons. Certificates of deposit are issued by banks, and SDLs are issued by state governments.

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