Correct Answer: Statement 1 is true, and statement 2 is true.

Solution : The correct answer is (a) Statement 1 is true, and statement 2 is true.

Statement 1 is true. Treasury bills are indeed short-term debt instruments issued by the government with maturities typically ranging from a few weeks to a year.

Statement 2 is true. Treasury bills can also be seen as short-term loans provided by individuals, institutions, or entities, including commercial banks, to the government. When someone purchases a Treasury bill, they are effectively lending money to the government for a specified period, and the government repays the principal along with interest upon maturity. In this sense, Treasury bills can be viewed as short-term loans provided by various entities, including commercial banks.