Treasury Bills

Posted in Finance, Accounting and Economics Terms, Total Reads: 1061
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Definition: Treasury Bills

These are short term instruments of raising debt issued by the US  government. These are issued over a period of three, six and ten weeks in denominations of 1000$ The treasury bills can be issued for a sum not exceeding  5 million dollars.

No annual interests are paid on these bonds .The appreciation in the market value of these bonds is what brings the return to an investor.

Example

A treasury bill of amount Rs 19,800 is issued by the Us government for a six month period.  The final amount of Rs 20,000 is paid at the end of the six month period

 

The return is inclusive of

  • Discounted issue price of the bill.
  • The appreciation received on the bond


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