ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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commercial paper
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treasury bill
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call money
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certificate of deposit
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Detailed explanation-1: -Treasury bills are one of the most popular short-term government schemes issued by the RBI and are backed by the central government.
Detailed explanation-2: -1.3 Treasury bills or T-bills, which are money market instruments, are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day. Treasury bills are zero coupon securities and pay no interest.
Detailed explanation-3: -It acknowledges the Government’s debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more).
Detailed explanation-4: -Adhoc treasury bills are issued in favour of the RBI only.
Detailed explanation-5: -In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs).