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Difficulty: MediumThe Money Market: Operations and Financial Instruments

Treasury Certificates are short- to medium-term money market instruments issued by the Central Bank on behalf of the government, with maturity periods typically ranging between one and two years.

Answer: Answer

Answer

The statement is true because Treasury Certificates are money market debt instruments issued by the Central Bank for government borrowing, with maturity periods typically between one and two years.
The statement accurately reflects the definition and tenure of Treasury Certificates in Commerce. They are issued by the Central Bank to meet government funding needs for periods spanning one to two years.

Step-by-Step Solution

1
Identify the issuing authority and financial market segment for Treasury Certificates.
Treasury Certificates are issued by the Central Bank on behalf of the government within the money market.
Money markets deal with short- to medium-term credit instruments used by governments and financial institutions.
2
Analyze the maturity period of Treasury Certificates relative to other government instruments.
Treasury Certificates have a maturity period of 1 to 2 years, bridging very short-term Treasury Bills (under 1 year) and long-term Development Stocks.
Understanding maturity profiles helps distinguish between various government financial market instruments.

Key Concept

Characteristics and maturity duration of Treasury Certificates in the money market
Estimated Time:1m 0s
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Topics

The Money Market: Operations and Financial Instruments

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