CA Foundation · Business Economics · Money Market
Which one of the following statements about Treasury Bills (T-bills) in India is correct?
The correct statement is that T-bills are issued by the Government of India at a discount and redeemed at par. Their return is the difference between issue price and face value. They have no coupon, maturities are up to 364 days, and they trade in the secondary market.
- AThey are issued by the Government of India at a discount and redeemed at parCorrect
- BThey are issued by companies at a premium and redeemed at a discount
- CThey pay periodic fixed coupon interest and mature after ten years
- DThey are issued only to individuals and can never be traded in the secondary market
Explanation
T-bills are short-term government securities, with maturities of 91, 182 and 364 days, issued at a discount to face value and redeemed at par; the difference is the return. They carry no coupon, are not issued by companies, and are tradable in the secondary market.
Did you get it right without looking?
One question tells you little. A timed set on Money Market shows your real accuracy, how long you take and where you lose marks.
More Money Market questions
- Which statement about the money market is correct?
- In the Indian money market, funds that are borrowed and lent for a period of just one day (overnight) are known as:
- Which of the following statements about the call money market is correct?
- The RBI announces an open market operation (OMO) in which it purchases government securities from the market. What is the likely effect on t…
- In a money market initially in equilibrium, the central bank keeps the money supply unchanged but the public's demand for money rises at eve…
- Which of the following actions by the RBI would normally reduce the money multiplier?