Which statement describes Treasury bills?

Which statement describes Treasury bills?

• A. They mature in 1 to 10 years.
• B. They are issued in denominations of $50,000.
• C. They pay semiannual interest.
• D. They mature in 13, 26, or 52 weeks and are issued in minimum denominations of $10,000.

Answer: (D)

Treasury bills are short-term U.S. government securities issued at a discount and maturing in 13, 26, or 52 weeks. They don’t pay coupon interest; instead, the return comes from the difference between the purchase price and the par value at maturity. They are issued in minimum denominations of $10,000. This combination—short maturities of 13/26/52 weeks and a $10,000 minimum denomination—best describes Treasury bills. Longer maturities (A) refer to notes and bonds, the idea of semiannual interest (C) applies to notes and bonds, and a $50,000 denomination (B) isn’t the standard description for T-bills.

Treasury bills are short-term U.S. government securities issued at a discount and maturing in 13, 26, or 52 weeks. They don’t pay coupon interest; instead, the return comes from the difference between the purchase price and the par value at maturity. They are issued in minimum denominations of $10,000. This combination—short maturities of 13/26/52 weeks and a $10,000 minimum denomination—best describes Treasury bills. Longer maturities (A) refer to notes and bonds, the idea of semiannual interest (C) applies to notes and bonds, and a $50,000 denomination (B) isn’t the standard description for T-bills.