Answer after reading following about Treasury Bill.

(A) A treasury bill is an instrument of short term borrowing by the Government of India

(B) The maturity period of a Treasury bill is more than one year

(C) Treasury bills are also known as Zero Coupon Bonds

(D) Treasury bills are available for a minimum amount of ₹20,000

(E) Treasury bills are issued at a price which is lower than their face value and repaid at par.

Choose the correct answer from the options given below :

(A), (C) and (E) Only

The correct answer is option 2- (A), (C) and (E) Only.

(A) A Treasury bill is an instrument of short-term borrowing by the Government of India. This statement is true.

(B) The maturity period of a Treasury bill is more than one year. This statement is not true. Treasury bills have a maturity period of less than one year, typically ranging from 91 days to 364 days.

(C) Treasury bills are also known as Zero Coupon Bonds. This statement is true.

(D) Treasury bills are available for a minimum amount of 20,000. This statement is not true.

(E) Treasury bills are issued at a price that is lower than their face value and repaid at par. This statement is generally true. Treasury bills are typically issued at a discount, meaning that they are sold for less than their face value and redeemed at their face value upon maturity.

A Treasury bill is basically an instrument of short-term borrowing by the Government of India maturing in less than one year. They are also known as Zero Coupon Bonds issued by the Reserve Bank of India on behalf of the Central Government to meet its short-term requirement of funds. Treasury bills are issued in the form of a promissory note. They are highly liquid and have assured yield and negligible risk of default. They are issued at a price which is lower than their face value and repaid at par. The difference between the price at which the treasury bills are issued and their redemption value is the interest receivable on them and is called discount.