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Management · Q463

International Finance and Treasury

Graduate and Post Graduate · Management · question 463

Q463

Government issues treasury bills at discounted rate from

A.
face value
Answer
B.
book value
C.
premium value
D.
federal value

Answer: Option A

Solution

Answer: Option A
Solution:
Government issues treasury bills at discounted rate from face value. U.S. Treasury bills (T-bills) are typically sold at a discount from their par value. The level of discount is determined during Treasury auctions. Unlike other U.S. Treasury securities such as Treasury notes (T-notes) and Treasury bonds (T-bonds), T-bills do not pay periodic interest at six-month intervals.