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New Microsoft Power Point Presentation
New Microsoft Power Point Presentation
• No coupon and trade at a discount, meaning that the investor is not paid
interest in increments over the life of the investment, but instead the
security is sold for an amount less than the face or par value of the
security. When the security reaches maturity, the investor is paid face
value.
• Interest = par value minus cost
• 3- and 6-month treasury bills are auctioned every Monday
• One year treasury bills are auctioned every four weeks
• Treasury Bills mature on Thursdays unless it’s a holiday, then they mature
on the next business day
• Treasury Bills are quoted and traded on a discount yield that is converted
to a bond equivalent yield.
TREASURY BILL SPECIMEN
THE CHARACTERISTICS OF CD
• Unsecured debt
• Bearer or depository trust company eligible. A depository trust
company is a firm through which the members can use a computer to
arrange for investment securities to be delivered to other members via
computer, thus there is no physical delivery of the securities. A
depository trust company uses computerized debit and credit entries.
• Discount (most common). A discount is the difference between the
purchase price of a security and its par (face) value. This discount
represents the income to be earned on the security, and will be accreted
over the life of the security.
• Purchased direct or through dealers.
• Trades at a discount