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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities

Which of the following is a feature of a Treasury Bill issued by the Government of India?

A Treasury Bill is issued at a discount to its face value and redeemed at par on maturity, so the investor's return is the difference. It pays no periodic coupon and has short tenors of 91, 182 or 364 days.

  1. AIt is issued at a discount and redeemed at face valueCorrect
  2. BIt pays a half-yearly coupon
  3. CIt is issued only for tenors above 10 years
  4. DIt is issued only to banks

Explanation

Treasury Bills are zero-coupon money market instruments issued at a discount to face value and redeemed at par. The return is the difference. Tenors are 91, 182 and 364 days, and they are not restricted to banks.

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