ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Treasury bills have high liquidity because of extensive secondary markets. A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.

Detailed explanation-2: -T-bills are short-term securities issued on behalf of the government by the RBI and are used in managing liquidity for the government. 1) T-bills are shortterm securities issued on behalf of the government by the RBI and are used in managing shortterm liquidity needs of the government.

Detailed explanation-3: -A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded is known as Money Market. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year.

Detailed explanation-4: -Treasury bills have a maturity of one year or less, and they do not pay interest before the expiry of the maturity period. 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).