Question

True or False: Treasury Bills are unique amongst Treasury Securities in that they do not pay...

True or False: Treasury Bills are unique amongst Treasury Securities in that they do not pay a coupon. Rather, they are issued on a discount basis.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER

CORRECT ANSWER : TRUE

EXPLANATION :

  • Treasury Bills are basically medium of Raising Short-term Finance by the US Government for meeting out their short term funds requiremets.
  • Such Instruments are Issued at a Price LOWER THAN the PAR VALUE and are REDEEMED at PAR VALUE.
  • So the Difference can be Considered as Interest Payment.
  • HOWEVER NO SEPERATE COUPON is paid as it is already issued at a price lower than its Redemption Value which is the Par Value of the Bill.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
An open market purchase of government securities (such as Treasury Bills) by the Central Bank will...
An open market purchase of government securities (such as Treasury Bills) by the Central Bank will decrease the money supply and raise the interest rate. you can say true or false.
1. True or False (circle) - Trading securities are securities which pay interest and which have...
1. True or False (circle) - Trading securities are securities which pay interest and which have a fixed maturity date. 2. True or False (circle) -Debt Securities are securities that represent an ownership interest in the company and which do not have a fixed maturity date.
U.S. Treasury issues three types of Treasury securities: Treasury bills (T-bills), Treasury notes (T-notes), and Treasury...
U.S. Treasury issues three types of Treasury securities: Treasury bills (T-bills), Treasury notes (T-notes), and Treasury bonds (T-bonds).  The time to maturity (TTM) of T-bills is 12-month or less than 12-month.  The TTM of T-notes is between 1 year and 10 years.  The TTM of T-bonds is longer than 10 years.  Which one(s) (T-bills, T-notes, or T-bonds) belong to the money market instrument(s)?  Which one(s) belong to the capital market instrument(s)?  If you would like to buy Treasury securities, which...
Treasury Securities: Nevada Company has bought T-bills with face amount $5.45 million, with a discount of...
Treasury Securities: Nevada Company has bought T-bills with face amount $5.45 million, with a discount of 4.73%, and time to maturity 73 days. Find its bond equivalent yield, and its yield as a zero coupon bond. Answers - 4.84%, 4.94% ♥
The group that is responsible for the buying and selling of government securities (treasury bills, notes,...
The group that is responsible for the buying and selling of government securities (treasury bills, notes, and bonds) as a tool of monetary policy is: Group of answer choices the Federal Open Market Committee (FOMC). the Congressional Banking and Securities Committee. the Federal Advisory Council. the Council of Economic Advisors.
36. Cash Management by investing in marketable securities such as Treasury Bills, Commercial Paper, of Negotiable...
36. Cash Management by investing in marketable securities such as Treasury Bills, Commercial Paper, of Negotiable Certificates of Deposit are all forms of short-term lending. T F 37. If a firm has a profit margin of 10%, it can increase sales by lowering its credit standards T F 38. Financing Working Capital with Short-Term Financing rather than Long-Term Financing will generally be more profitable. T F
All of the following are money market securities except: Corporate bonds. Treasury bills. Repurchase agreements. All...
All of the following are money market securities except: Corporate bonds. Treasury bills. Repurchase agreements. All of the above are money market securities.
HOW DO I ENTER THIS PROBLEM INTO EXCEL? One-year Treasury bills currently earn 4.10 percent. You...
HOW DO I ENTER THIS PROBLEM INTO EXCEL? One-year Treasury bills currently earn 4.10 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.30 percent. The liquidity premium on 2-year securities is 0.08 percent. If the liquidity premium theory is correct, what should the current rate be on 2-year Treasury securities?
You are considering investing $1,000 in a portfolio. The portfolio is composed of Treasury bills that...
You are considering investing $1,000 in a portfolio. The portfolio is composed of Treasury bills that pay 5% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in are 60% and 40%, respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a portfolio with an expected rate of return of 11%, you should invest __________ percent...
1a. Treasury Inflation-Protected Securities (TIPS) pay a fixed interest rate for life. pay a variable interest...
1a. Treasury Inflation-Protected Securities (TIPS) pay a fixed interest rate for life. pay a variable interest rate that is indexed to inflation but maintain a constant principal. provide a constant stream of income in real (inflation-adjusted) dollars. have their principal adjusted in proportion to the Consumer Price Index. provide a constant stream of income in real (inflation-adjusted) dollars and have their principal adjusted in proportion to the Consumer Price Index. 1b. Which one of the following is not a money...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT