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    Question

    Which of the following is a discount instrument in the

    Indian money market?
    A Certificate of Deposit (CD) Correct Answer Incorrect Answer
    B Commercial Paper (CP) Correct Answer Incorrect Answer
    C Treasury Bill (T-Bill) Correct Answer Incorrect Answer
    D Both (b) and (c) Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    All three instruments—Certificates of Deposit (CDs), Commercial Paper (CP), and Treasury Bills (T-Bills)—are typically issued at a discount to their face value and redeemed at face value at maturity. The difference constitutes the interest earned by the investor.

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