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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?
Assertion (A): The returns on Treasury Bills are not that attractive.
Reason (R): They are zero-risk instruments.
- a)Both A and R are true and R is the correct explanation of A
- b)Both A and R are true, but R is not the correct explanation of A
- c)A is true, but R is false
- d)A is false, but R is true
Correct answer is option 'A'. Can you explain this answer?
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Direction: In the question given below are two statements labelled at...
U.S. Treasuries are indeed risk-free for individuals who hold individual bonds until maturity. For those who sell their bonds before maturity or invest in long-dated Treasury funds, there is a risk.
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Direction: In the question given below are two statements labelled at...
Assertion and Reason:
- Assertion (A): The returns on Treasury Bills are not that attractive.
- Reason (R): They are zero-risk instruments.
Explanation:
Definition:
- Treasury Bills (T-bills) are short-term debt instruments issued by the government to finance its short-term borrowing requirements. They are considered to be one of the safest investment options available in the market.
Explanation of Assertion (A):
- The returns on Treasury Bills are typically lower compared to other investment options such as stocks, bonds, or mutual funds.
- The reason behind this is that T-bills are considered to be low-risk investments as they are backed by the government.
- The government guarantees the repayment of the principal amount invested in T-bills along with the promised interest.
- Due to the low risk associated with T-bills, investors are willing to accept lower returns.
Explanation of Reason (R):
- Treasury Bills are known for their zero-risk nature.
- This means that the chances of default by the government on its repayment obligations are extremely low.
- The government is considered to be the most creditworthy borrower in the country.
- Unlike other investment options, such as stocks or corporate bonds, there is no risk of losing the principal amount invested in T-bills.
- Therefore, T-bills are considered to be zero-risk instruments.
Conclusion:
- Both the assertion and reason are true.
- The reason (R) correctly explains the assertion (A) as T-bills being zero-risk instruments contribute to their relatively unattractive returns.
- Hence, option (A) is the correct answer.
- Assertion (A): The returns on Treasury Bills are not that attractive.
- Reason (R): They are zero-risk instruments.
Explanation:
Definition:
- Treasury Bills (T-bills) are short-term debt instruments issued by the government to finance its short-term borrowing requirements. They are considered to be one of the safest investment options available in the market.
Explanation of Assertion (A):
- The returns on Treasury Bills are typically lower compared to other investment options such as stocks, bonds, or mutual funds.
- The reason behind this is that T-bills are considered to be low-risk investments as they are backed by the government.
- The government guarantees the repayment of the principal amount invested in T-bills along with the promised interest.
- Due to the low risk associated with T-bills, investors are willing to accept lower returns.
Explanation of Reason (R):
- Treasury Bills are known for their zero-risk nature.
- This means that the chances of default by the government on its repayment obligations are extremely low.
- The government is considered to be the most creditworthy borrower in the country.
- Unlike other investment options, such as stocks or corporate bonds, there is no risk of losing the principal amount invested in T-bills.
- Therefore, T-bills are considered to be zero-risk instruments.
Conclusion:
- Both the assertion and reason are true.
- The reason (R) correctly explains the assertion (A) as T-bills being zero-risk instruments contribute to their relatively unattractive returns.
- Hence, option (A) is the correct answer.
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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer?
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Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer?.
Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the question given below are two statements labelled at Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?Assertion (A): The returns on Treasury Bills are not that attractive.Reason (R): They are zero-risk instruments.a)Both A and R are true and R is the correct explanation of Ab)Both A and R are true, but R is not the correct explanation of Ac)A is true, but R is falsed)A is false, but R is trueCorrect answer is option 'A'. Can you explain this answer?.
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