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Capital & Money Markets Assignment# 1 - Treasury Bills

Capital & Money Markets Assignment# 1 - Treasury Bills

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Published by Deepak Motiramani
This presentation briefly mentions about Treasury Bills and its role in Capital & Money Market instrument. It may be useful for students pursuing Finance Specialization in regular MBA course.
This presentation briefly mentions about Treasury Bills and its role in Capital & Money Market instrument. It may be useful for students pursuing Finance Specialization in regular MBA course.

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Categories:Types, Business/Law
Published by: Deepak Motiramani on Sep 17, 2013
Copyright:Attribution Non-commercial

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09/17/2013

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Treasury Bills
ByDeepak Motiramani (2012G11)Hrishikesh Wattamwar (2012G15)Manish Jain (2012G18)Naem Mujawar (2012G19)Sachin Kumar Bansal (2012G44)
 
History
In 1914, United States carried a debt of $1 billion
By 1919, end of World War I, the debt rose to $25 billion
Personal Income Tax rose to 73%
Bonds and short term debts were not sufficient to paythis debt
In 1921, personal income tax was reduced from 73% to58%, which reduced revenue and Treasury was forcedto consider other debt management tools
In 1929, new security -
Zero coupon bonds
 
 – 
wasintroduced/auctioned. It had less than one-year maturity and was issued at a discount of face value.
These were called Treasury Bills or T-Bills because oftheir short-term nature.

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