Which of the following is true of Treasury bills?
A)Interest on Treasury bills is not exempt from state income taxes.
B)Interest on Treasury bills is exempt from federal income taxes.
C)Treasury bills pay a lower pre-tax yield than comparable corporate securities.
D)All the options are true.
E)None of the options is correct.

Question

Quizplus · Accepted Answer

Treasury bills are issued by the federal government and the interest earned on them is exempt from federal income taxes. However, the interest earned may still be subject to state income taxes. Treasury bills typically have a lower pre-tax yield than comparable corporate securities due to their lower risk profile.

Which of the Following Is True of Treasury Bills