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

Which statement about Treasury Bills (T-Bills) held by an investor in a demat account is correct?

Treasury Bills are issued at a discount to face value and redeemed at par, so the investor's return is the difference. They are short-term government instruments of 91, 182 or 364 days and pay no periodic coupon.

  1. AThey pay periodic half-yearly coupons
  2. BThey are issued at a discount and redeemed at face valueCorrect
  3. CThey are issued only with a maturity of 10 years
  4. DThey are issued by corporates to raise long-term funds

Explanation

T-Bills are short-term government money market instruments issued at a discount to face value and redeemed at par, with the gain being the difference. They carry no coupons, have maturities of 91, 182 or 364 days, and are issued by the government, not corporates.

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