An investor has purchased a 91 days treasury bill with a face value of Rs. 50,000 for Rs. 45,000. He held the bill till maturity date and received Rs. 50,000. The difference of Rs. 5,000 represents
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Interest received
Option (1) Discount allowed — Incorrect. Discount allowed is a reduction given by a seller to a buyer. Here the investor only bought a bill at a lower price and got its face value back.
Option (2) Interest received — Correct. The bill was bought at Rs. 45,000 and the investor received Rs. 50,000 on maturity. The difference of Rs. 5,000 represents the interest received by the investor.
Option (3) Trade discount received — Incorrect. Trade discount is a reduction in the list price given by a seller on goods. There was no sale of goods here.
Option (4) Cash discount received — Incorrect. Cash discount is allowed for quick payment of a bill by a buyer. The investor was not paying a bill.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. NCERT (Pre-rationalised Edition): “Example: Suppose an investor purchases a 91 days Treasury bill with a face value of Rs. 1,00,000 for Rs. 96,000. By holding the bill until the maturity date, the investor receives Rs. 1,00,000. The difference of Rs. 4,000 between the proceeds received at maturity and the amount paid to purchase the bill represents the interest received by him.” |