Treasury bills are short-term government securities that are issued at a discount from their face value and mature at par, meaning the investor receives the face value at maturity. They do not pay a fixed annual interest rate; instead, the return to the investor is the difference between the purchase price and the amount received at maturity.

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Treasury Bills Are

Question 137

Multiple Choice

Treasury bills are:

A) issued on a premium basis and pay a fixed annual interest rate.
B) issued on a discount basis and mature at par.
C) issued on a premium basis and mature at par.
D) issued on a discount basis and pay a fixed annual interest rate.

Correct Answer: