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