With respect to U.S. Treasury bills,
A)the bid price is always greater than the asked price.
B)the asked price is always greater than the bid price.
C)the bid price is only greater than the asked price if investors expect interest rates to decline in the future.
D)the asked price is only greater than the bid price if investors expect interest rates to decline in the future.

Question

Quizplus · Accepted Answer

In the case of U.S. Treasury bills, the bid price is the price at which buyers are willing to buy the security, while the asked price (also known as the offer price) is the price at which sellers are willing to sell the security. The bid price is always lower than the asked price, indicating a bid-ask spread. This is because sellers seek the highest price possible for their securities, while buyers seek to pay the lowest price possible. Thus, the asked price is always greater than the bid price.

With Respect to U.S. Treasury Bills