Which of the following is an example of zero coupon bonds?

Treasury Bill

The correct answer is Option 1: Treasury Bill

Zero coupon bonds do not pay periodic interest (coupon). Instead, they are issued at a discount and redeemed at face value, with the difference representing the return to the investor. Treasury Bills are issued by the government at a discount and do not carry any interest payments, which makes them classic zero coupon instruments.

"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. "