Question

A Treasury Bill is basically

Options

• An instrument to borrow short-term funds

• An instrument to borrow long-term funds

• An instrument of capital market

• None of the above

Answer 1

An instrument to borrow short-term funds

Explanation -

A Treasury Bill is an instrument used by the Indian government to borrow short-term financing.

It takes less than a year for them to mature. Zero-Coupon Bonds are another name for them. They are issued on behalf of the Central Government by the RBI.