When the Canadian federal government issues a short-term zero-coupon bond,it is basically issuing a
A) treasury bill.
B) commercial paper.
C) promissory note.
D) bank acceptance.

Question

Quizplus · Accepted Answer

A short-term zero-coupon bond is essentially a type of Treasury bill, which is an investment issued by the Canadian federal government with a maturity of less than one year. Treasury bills are sold at a discount to face value and do not pay periodic interest like traditional bonds. This type of investment is often used by governments to fund short-term deficits or to manage their cash flow needs. Commercial paper is a short-term debt instrument issued by corporations, promissory notes are direct promises to repay a debt, and bank acceptances are financial instruments used in international trade finance.

When the Canadian Federal Government Issues a Short-Term Zero-Coupon Bond,it