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    Question

    Which one of the following is/are True about the

    difference between Bonds and Treasury Bills? I- maturities less than 1 year are called T-bills and those more than one year are called bonds. II- T-bills are issued at a discount to their true (PAR) value and upon expiry, its redeemed at its true value. III- T-bills can’t be bought by Individuals.
    A Only I Correct Answer Incorrect Answer
    B Only II Correct Answer Incorrect Answer
    C I & II Correct Answer Incorrect Answer
    D II & III Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    G-Secs is a collective term for these two types of securities: maturities less than 1 year are called T-bills and those more than one year are called bonds. There are three T-bills variants and they vary based on the maturity period. They are 91 days, 182 days, and 364 days. T-bills do not carry an interest component, in fact, this is one of the biggest differences between T-bills and Bonds. T-bills are issued at a discount to their true (PAR) value and upon expiry, its redeemed at its true value.

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