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    Question

    The treasury bills issued in India are in the nature of

    _________  
    A Coupon securities Correct Answer Incorrect Answer
    B Zero-coupon securities Correct Answer Incorrect Answer
    C Fixed-coupon securities Correct Answer Incorrect Answer
    D A or B Correct Answer Incorrect Answer
    E B or C Correct Answer Incorrect Answer

    Solution

    Treasury bills (T-Bills) are short term (less than 1 year maturity) government debt securities that are auctioned by the Reserve Bank of India (RBI) on behalf of 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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