Home
Class 12
BUSINESS STUDIES
Which money market security is also know...

Which money market security is also known as zero coupon bond?

Text Solution

Verified by Experts

The correct Answer is:
Treasury bill' is also known as zero coupon bond.
A zero coupon bond is a bond which is issued at a price which is less than its face value and, is repaid at its face value on the date of its maturity. Since treasury bills follow this rule, they are also called zero coupon bonds.
Promotional Banner

Similar Questions

Explore conceptually related problems

Name the financial instrument which may be used in the following situations: (i) A company needs funds to meet floatation cost in order to issue equity shares in the market. (ii) The instrument that is issued during the period of tight liquidity when the deposit growth of bank is slow but demand for credit is high. (iii) These are also known as zero coupon bonds and are isssued by RBI on the behalf of central goverment. (iv) It is used by one bank having surplus funds to meet the funds requirements of another bank facing shortage of funds.

Zero Coupon Rate

What is MZM in money market?

Identify the markets highlighted in following statements: (i) This market directly contributes to capital market. (ii) This market deals in instrument whose maturity upto one year. (iii) It deals in medium and long term securities. (iv) It is also konwn as Stock Exchange and deals in sale and purchase of previously isssued secrities. (v) It requires less investment as value of securities is generally low.