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  • Draw Distinctions Between Treasury Bills and Treasury Bonds

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    parthona
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    Treasury bills are short-term government securities that mature in one year or less, do not pay interest, and offer an earlier return of investment than Treasury bonds. Treasury bonds are long-term government securities that mature in 10 years or more, pay semi-annual interest until maturity but cannot be redeemed before their maturity date, and may have a market price higher or lower than their face value depending on interest rates. Both provide less risk than other investments since they are backed by the US government.

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    Feature of Treasury Bonds

    Título original

    Treasury Bonds

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    Treasury bills are short-term government securities that mature in one year or less, do not pay interest, and offer an earlier return of investment than Treasury bonds. Treasury bonds are long-term government securities that mature in 10 years or more, pay semi-annual interest until maturity but cannot be redeemed before their maturity date, and may have a market price higher or lower than their face value depending on interest rates. Both provide less risk than other investments since they are backed by the US government.

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato DOCX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    11 visualizações1 página

    Draw Distinctions Between Treasury Bills and Treasury Bonds

    Enviado por

    parthona
    Treasury bills are short-term government securities that mature in one year or less, do not pay interest, and offer an earlier return of investment than Treasury bonds. Treasury bonds are long-term government securities that mature in 10 years or more, pay semi-annual interest until maturity but cannot be redeemed before their maturity date, and may have a market price higher or lower than their face value depending on interest rates. Both provide less risk than other investments since they are backed by the US government.

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato DOCX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
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    Draw distinctions between Treasury bills and Treasury bonds.

    Treasury bills
    (1) T-Bills are government securities which
    mature in one year or less.

    Treasury bonds
    (1) T-Bonds are government securities that
    mature in 10 years or more.

    (2) T-Bills do not pay interest.

    (2) T-Bonds have a stated interest rate that is


    paid semi-annually until maturity.

    (3) It is short-term obligations for govt.

    (3) It is long-term obligations for govt.

    (4) It is less risky compared to other


    investments since they are secured by the
    government.

    (4) It is also less risky compared to other


    investments since they are secured by the
    government.

    (5) T-Bills offer an earlier return of


    investment than T-Bonds.

    (5) It cannot be redeemed before their


    maturity dates.

    (6) Generally par value of T-Bills are


    discounted at auction.

    (6) The market price of a T-Bond may be


    higher or lower than the face amount,
    depending on the rate paid by the bond
    compared to prevailing market interest rates.

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