TreasuryBillsAndCommercialPaper幻灯片.pptVIP

Chapter 7 Applications Of Simple Interest 7.3 Treasury Bills And Commercial Paper Treasury bills (T-bills) are paper contracts issued to lenders by the federal government and several provincial governments when they borrow money for terms of less than one year. T-bills do not carry an interest rate. The issuing government guarantees payment of the face value at maturity. The investor purchases T-bills at a discounted price reflecting a rate of return that is determined by current marked conditions. The discounted price is determined by computing the present value of the T-bills using the