Question : Which money market instrument is highlighted in the given statement?
Statement: These are highly liquid nature because the RBI is ever ready to buy them on discount.
Option 1: Treasury bill
Option 2: Call money
Option 3: Certificate of deposits
Option 4: Commercial bill
Correct Answer: Treasury bill
Solution : Treasury bill means the short term instrument which the central government issues to the Financial institutions for the general public in order to meet the short term financial needs. Treasury bills are of highly liquid nature because the RBI is ever ready to buy them on discount.
Hence option A is correct.