Treasury securities are used to develop the benchmark interest rates. There are two categories of U.S. Treasury securities: ________.

Question

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The two categories of U.S. Treasury securities are discount and coupon securities. Discount securities are sold at a discount to their face value and do not make interest payments, while coupon securities make periodic interest payments and have a face value at maturity. These securities are used as benchmarks for interest rates because they are highly liquid and have low credit risk.

Treasury Securities Are Used to Develop the Benchmark Interest Rates