ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fixed interest Bonds
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Flat Rate Bonds
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Low-Interest Bonds
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Zero-Coupon Bonds
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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 are zero-coupon bonds that are usually sold at a discount and the difference between the purchase price and the par amount is your accrued interest.
Detailed explanation-3: -Zeros, as they are sometimes called, are bonds that pay no coupon or interest payment. With a zero, instead of getting interest payments, you buy the bond at a discount from the face value of the bond and are paid the face amount when the bond matures.
Detailed explanation-4: -What Is a Zero-Coupon Bond? A zero-coupon bond, also known as an accrual bond, is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value.
Detailed explanation-5: -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.”