Multiple choice

Treasury bills are instruments of short-term borrowing. It is true in case of

  1. borrowings by government of India

  2. borrowings by state ministry

  3. borrowings by companies in forms of shares & debentures

  4. borrowings from world bank

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A Correct answer
Explanation

Treasury bills are instrument of short-term borrowings by the Government of India, issued as promissory notes under discount. The interest received on them is the discount, which is the difference between the price at which they are issued and their redemption value. They have assured yield and negligible risk of default.

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