Question

Why are T-bills a favorable money market instrument for the U.S government? For investors?

Answer 1

T-bills is a favorable money market instrument for the U.S government as T-Bills offer benefits as, helping them to meet their borrowing requirements in a cost-effective way. This is a marketable, liquid security with guaranteed returns. It is popular with customers because of the fact that it is easy to invest in T-bills. There is a choice of products with different terms, including 1-year, 6-month, and 3-month maturities.

A major benefit for investors is that they are affordable meaning that they can be purchased by people from all walks of life. This is the safest investment instrument (virtually risk-free), Treasury bills are safe to invest in because they are backed by the government.This is a liquid instrument in that it is short-term in nature. and many use it to diversify their investment portfolios. Bills offer acceptable level of returns for a safe investment vehicle