Which one of the following is used by Treasury dealers to indicate the price they are willing to pay to purchase a Treasury bill?
A)par rate
B)bid discount
C)face rate
D)asked discount
E)bank discount

Question

Quizplus · Accepted Answer

Bid discount is the price that Treasury dealers are willing to pay to purchase a Treasury bill. The bid discount represents the percentage discount from the face value of the bill that the dealer is willing to pay. The asked discount, on the other hand, represents the price at which dealers are willing to sell a Treasury bill. Par rate and face rate are not commonly used terms in Treasury bill trading, and bank discount is another term for the bid discount.

Which One of the Following Is Used by Treasury Dealers