Treasury Bills

QUOTE AND NEWS
The Economic Times  Nov 7  Comment 
The Reserve Bank of India will auction 140 billion rupees ($2.27 billion) of treasury bills on November 12.
Mondo Visione  Oct 22  Comment 
Nasdaq (Nasdaq:NDAQ) today announced that eSpeed, the exchange group's over-the-counter platform for electronic trading in U.S. Treasury securities, successfully introduced U.S. Treasury Bill (TBills) with notional average daily volume exceeding...
SeekingAlpha  Oct 10  Comment 
By Donald van Deventer: Forward 1-month T-bill rates fell again this week, dropping at nearly every monthly maturity for the next 10 years. The fall in implied forward 1-month Treasury bill rates stems from a decrease of 0.07% to 0.12% in current...
SeekingAlpha  Oct 3  Comment 
By Donald van Deventer: Forward 1-month T-bill rates fell again this week, dropping at every monthly maturity for the next 10 years. The fall in implied forward 1-month Treasury bill rates stems from a decrease of 0.05% to 0.08% in current U.S....




 
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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

Formula

Image:Treasury_Bill_Discount.png


Image:Treasury_Bill_Yield.png

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