Question

Consider the following about government bonds

1. Bonds having maturity period upto 1 year are called Treasury Bills
2. Bonds having maturity period with more than 1 year are called Dated securities

Which of the above statements are true?

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. None of the above

Answer 1

The correct option is C Both 1 and 2

Dated securities are long term instruments issued by the government for borrowing. Short term instruments are treasury bills that have a maturity of less than one year (91 days, 182 days and 364 days).

For treasury bills, there is no interest payments but the bill is obtained at a discount.