Question

How does treasury bill pricing impact market?   What are the two types of bidders for Treasury...

How does treasury bill pricing impact market?  

What are the two types of bidders for Treasury bills?

Homework Answers

Answer #1

If treasury bill price rises then discount rate decreases. Lower the discount lower will be the interest rates in economy . This will increase market share price of companies. If treasury bill prices falls then the discount rate increases and interest rate in the economy increases. There will be a fall in the market price of shares.

Two types of bidders for treasury bills are
1.Competitive bidder: In competitive bidding treasury bills are sold in decreasing amount of price bid by the buyers of the bills.This influences the discount rate of the market.
2. Non competitive bond: In this buyers buy at average of all prices bid by the investors

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