Treasury bills (T-bills) pay
A)a fixed amount at maturity and no explicit interest payments; T-bills sell at a discount.
B)a fixed amount at maturity and explicit interest payments.
C)a fluctuating amount at maturity and no explicit interest payments.
D)a fluctuating amount at maturity and explicit interest payments.

Question

Quizplus · Accepted Answer

Treasury bills (T-bills) pay a fixed amount at maturity and no explicit interest payments. T-bills are sold at a discount, which means that the difference between the purchase price and the face value of the T-bill is the interest income that the investor earns.

Treasury Bills (T-Bills) Pay