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Question

Which of the following statements is not true with regard to Treasury bills?


A

They are highly liquid and have assured yield

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B

They are available for a minimum amount of ₹25,000 and in multiples thereof.

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C

They carry a high risk of default.

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D

Are issued in the form of a promissory note.

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Solution

The correct option is C

They carry a high risk of default.


Answer (c) They carry a high risk of default.

Explanation: Treasury bills are money market instruments provided by the Government of India as a promissory note with ensured reimbursement on a specific date in the future. Assets gathered through such tools are ordinarily used to meet momentary necessities or for short-term use requirements of the public authority, thus, lessening the overall financial deficiency of a country.


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