QUOTE AND NEWS
Reuters  May 13  Comment 
Average yields rose on treasury bills auctioned by Egypt's central bank on Sunday and the bank said it sold all the bills it had offered.
Reuters  May 11  Comment 
The weighted average yield on Mauritius' 364-day Treasury bills edged down to 3.89 percent at auction on Friday from 3.91 percent at the previous sale, the central bank said.
Reuters  May 6  Comment 
Average yields rose on treasury bills auctioned by Egypt's central bank on Sunday and the bank said it sold fewer of the bills than it offered.
Reuters  May 4  Comment 
Nigeria's interbank lending rates jumped this week to an average of 13.91 percent, from 11.83 percent last week, after the central bank issued about 90 billion naira worth of treasury bills to mop up excess liquidity.
Reuters  May 4  Comment 
The weighted average yield on Mauritian 364-day Treasury bills edged down to 3.91 percent at an auction on Friday from 3.93 percent at the previous sale, the central bank said.
Reuters  May 4  Comment 
Average yields on Egyptian treasury bills rose at an auction on Thursday and the central bank sold fewer than the 5 billion Egyptian pounds of bills it had offered, the central bank said.
Wall Street Journal  Apr 30  Comment 
Spending data bad but not awful; the Times' Apple tax story gets dissected; banks ease lending standards.
Reuters  Apr 29  Comment 
The yield on Egyptian treasury bills rose at an auction on Sunday and the central bank sold only 2 billion Egyptian pounds instead of the 3.5 billion pounds worth it had asked for, the Ministry of Finance said on its website.
Reuters  Apr 27  Comment 
The weighted average yield on Mauritian 364-day Treasury bills edged down to 3.93 percent at an auction on Friday from 3.95 percent at the previous sale, the central bank said.




 
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The graph to the left is the discount rate for T-Bills with a 3-month maturity.

Treasury bills are short-term debt securities issued by the U.S. Government. They are issued in lengths of four weeks (30 days), three months (90 days), six months (180 days), and one year (360 days). However, the one year bill is currently no longer issued. Treasury bills are known as a zero coupon, or discount security, since it pays the interest and principal at maturity.

The rates listed on Treasury bills are known as discount rates. However, it is important know two things when purchasing Treasury bills:

  1. The discount rate is annualized
  2. The Treasury assumes that a year has 360 days

Calculations

Image:Treasury_Bill_Discount.png


Image:Treasury_Bill_Yield.png

Example

Suppose you wanted to buy a $100,000 three month Treasury bill at 5%. Using the formulae above:

The discount rate would be $1,250, hence, you would pay $98,750 when purchasing the bill.

The annualized yield would be 5.13%. However, your yield over that 90 day period would be one fourth of that amount, which would be 1.28%.

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