BANKING GENERAL KNOWLEDGE
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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91 Days
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364 Days
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Both A and B
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None of these
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Detailed explanation-1: -As stated above, a government treasury bill is issued as a short-term fundraising tool for the government and has the highest maturity period of 364 days.
Detailed explanation-2: -They are sold in auctions at a discount from the par value of the bill. They are offered with maturities of 28 days (one month), 91 days (3 months), 182 days (6 months), and 364 days (one year).
Detailed explanation-3: -So in other words, the T-bill offers a return on investment of 12.4052%, but since you held it for 91 days, you will enjoy this return on a pro-rata basis. Typical 91-day yields are around 6-7.5%.
Detailed explanation-4: -What are the maturity terms for Treasury bills? Among bills auctioned on a regular schedule, there are six terms: 4 weeks, 8 weeks, 13 weeks, 17 weeks, 26 weeks, and 52 weeks.
Detailed explanation-5: -Treasury bills, or T-bills, have a maximum maturity period of 364 days. So, they are categorised as money market instruments (money market deals with funds with a maturity of less than one year).