Question

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

• A. They are highly liquid and have assured yield
• B. They are available for a minimum amount of ₹25,000 and in multiples thereof.
• C. They carry a high risk of default.
• D. Are issued in the form of a promissory note.

Answer 1

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.