True or false about liquidity tools

Exercise and reference answers

Questions

1. Statement is true

   No

   Statement

   Treasury bills carry a coupon.

2. Statement is true

   Yes

   Statement

   The LAF works on an overnight basis.

3. Statement is true

   No

   Statement

   Rural banks may use the LAF.

4. Statement is true

   Yes

   Statement

   Selling G-Secs drains rupee liquidity.

5. Statement is true

   Yes

   Statement

   G-Secs are auctioned on E-Kuber.

6. Statement is true

   No

   Statement

   Regulated entities may hold paper G-Secs.

Instructions

Decide whether each statement is true or false.

Explanation