Question

     In India, Treasury bills (T-bills) are used to raise

    short term money for the _____ 
    A Government Correct Answer Incorrect Answer
    B RBI Correct Answer Incorrect Answer
    C Financial institutions Correct Answer Incorrect Answer
    D Corporates Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Treasury bills (T-Bills) are short term (less than 1 year maturity) government debt securities that are used to raise funds for the Government. These are auctioned by the Reserve Bank of India (RBI) on behalf of the government. T-bills in India are presently issued in three tenors, namely, 91 day, 182 day and 364 day. T-bills are in nature of zero coupon securities i.e. do not pay interest but are issued at a discount and redeemed at the face value at maturity, leading to the implied interest/return/yield (difference of Face Value and Issue price as a percentage of Issue price). 

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