Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MARKET3 Marks
Question
How can one earn by investing in treasury bills?
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Answer
Government does not pay any interest to people who buy $T-$bills, but sells these bills at a discounted rate.
For example, government might sell treasury bill of $₹ 25,000$ at $₹ 23,500$ to the investor. The investor would then be paid the actual value i.e. $₹ 25,000$ on maturity date.
Thus, the difference between the purchase amount and redemption amount becomes the profit for the investor.
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