The difference between a Treasury bill's face value and its price is called the
A)time value
B)discount
C)coupon rate
D)bid
E)none of the above

Question

Quizplus · Accepted Answer

The difference between a Treasury bill's face value (also known as "par value" or "maturity value") and its price is called the discount. Treasury bills are issued at a discount from their face value, and the discount represents the earnings to the investor. For example, a Treasury bill with a face value of $10,000 might be purchased for $9,800, meaning the discount is $200. At maturity, the investor receives the full face value of $10,000, thus earning a profit of $200.

The Difference Between a Treasury Bill's Face Value and Its