As of November 2026, match each Indian money-market instrument or transaction with its distinguishing…
A Treasury bill is a short-term Union government security sold at a discount. Commercial paper is an unsecured promissory note, while a certificate of deposit is negotiable…
Choose your answer
As of November 2026, match each Indian money-market instrument or transaction with its distinguishing feature.
| Instrument or transaction | Feature |
|---|---|
| a. Treasury bill | 1. Negotiable instrument issued against a bank deposit |
| b. Commercial paper | 2. Collateralised borrowing arranged through a third-party agent |
| c. Certificate of deposit | 3. Short-term Union government security sold at a discount |
| d. Tri-party repo | 4. Unsecured borrowing through a promissory note |
Answer and explanation
Correct answer C
A Treasury bill is a short-term Union government security sold at a discount. Commercial paper is an unsecured promissory note, while a certificate of deposit is negotiable and represents a deposit with the issuer. In a tri-party repo, an agent facilitates the collateralised transaction between borrower and lender.
Practice for these exams
-
Jammu & Kashmir and Ladakh SET (JKSET/LASET)