ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -T-Bills, also known as zero coupon bonds, are issued by the RBI on the behalf of the cental government. Q. Name the financial instrument which may be used in the following situation. These are also known as zero coupon bonds and are issued by RBI on the behalf of central government.

Detailed explanation-2: -T-bills, T-notes, and T-bonds are fixed-income investments issued by the US Department of the Treasury when the government needs to borrow money. They are all commonly referred to as “Treasuries.”

Detailed explanation-3: -A coupon bond, also referred to as a bearer bond or bond coupon, is a debt obligation with coupons attached that represent semiannual interest payments. With coupon bonds, there are no records of the purchaser kept by the issuer; the purchaser’s name is also not printed on any kind of certificate.

Detailed explanation-4: -A zero-coupon/deep discount bond is a debt security with no coupon (zero-coupon) or substantially lower coupon than current interest rates. The bonds are issued at a discount to their nominal value, with the discount reflecting the prevailing market interest rate.