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Consider the following statements about Treasury Bills:
They are zero-coupon securities issued at discount.
They are issued by the Central Government and not State Governments.
They are usually long term securities with an average maturity of 10 years.
Which of the statements given above is/are correct?
- a)1 only
- b)1 and 2 only
- c)2 and 3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements about Treasury Bills: They are ...
Treasury Bills:
- Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation.
- In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issue only bonds or dated securities, which are called the State Development Loans (SDLs). Hence statement 2 is correct.
- Treasury bills or T-bills, which are money market instruments, are short term debt instruments issued by the Government of India and are presently issued in three tenors, namely, 91 days, 182 days and 364 days. Hence statement 3 is not correct. Treasury bills are zero-coupon securities and pay no interest. Instead, they are issued at a discount and redeemed at the face value at maturity. Hence statement 1 is correct and statement 3 is not correct.
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Consider the following statements about Treasury Bills: They are ...
To begin with, let's analyze each statement individually:
1) Treasury Bills are zero-coupon securities issued at a discount.
This statement is correct. Treasury Bills (T-Bills) are short-term debt instruments issued by the government to finance its short-term cash requirements. They are sold at a discount from their face value and do not pay any interest. The difference between the discounted purchase price and the face value represents the return for the investor.
2) Treasury Bills are issued by the Central Government and not State Governments.
This statement is also correct. Treasury Bills are issued by the Central Government in order to meet its funding requirements. State Governments issue their own short-term debt instruments known as State Development Loans (SDLs) to finance their respective expenditures.
3) Treasury Bills are usually long-term securities with an average maturity of 10 years.
This statement is incorrect. Treasury Bills are actually short-term securities with a maturity period of up to one year. They are typically issued for 91 days, 182 days, or 364 days, depending on the specific needs of the government.
Now, let's summarize the correct statements:
- Treasury Bills are zero-coupon securities issued at a discount.
- They are issued by the Central Government and not State Governments.
Therefore, the correct answer is option 'B' - 1 and 2 only.
1) Treasury Bills are zero-coupon securities issued at a discount.
This statement is correct. Treasury Bills (T-Bills) are short-term debt instruments issued by the government to finance its short-term cash requirements. They are sold at a discount from their face value and do not pay any interest. The difference between the discounted purchase price and the face value represents the return for the investor.
2) Treasury Bills are issued by the Central Government and not State Governments.
This statement is also correct. Treasury Bills are issued by the Central Government in order to meet its funding requirements. State Governments issue their own short-term debt instruments known as State Development Loans (SDLs) to finance their respective expenditures.
3) Treasury Bills are usually long-term securities with an average maturity of 10 years.
This statement is incorrect. Treasury Bills are actually short-term securities with a maturity period of up to one year. They are typically issued for 91 days, 182 days, or 364 days, depending on the specific needs of the government.
Now, let's summarize the correct statements:
- Treasury Bills are zero-coupon securities issued at a discount.
- They are issued by the Central Government and not State Governments.
Therefore, the correct answer is option 'B' - 1 and 2 only.
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Consider the following statements about Treasury Bills: They are zero-coupon securities issued at discount. They are issued by the Central Government and not State Governments. They are usually long term securities with an average maturity of 10 years. Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements about Treasury Bills: They are zero-coupon securities issued at discount. They are issued by the Central Government and not State Governments. They are usually long term securities with an average maturity of 10 years. Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements about Treasury Bills: They are zero-coupon securities issued at discount. They are issued by the Central Government and not State Governments. They are usually long term securities with an average maturity of 10 years. Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements about Treasury Bills: They are zero-coupon securities issued at discount. They are issued by the Central Government and not State Governments. They are usually long term securities with an average maturity of 10 years. Which of the statements given above is/are correct?a)1 onlyb)1 and 2 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
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