US Treasury bill


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Related to US Treasury bill: US Treasury note

US Treasury bill

US government debt with a maturity of less than a year.

Treasury Bill

A debt security backed by the full faith and credit of the United States government with a maturity of one year or less. Very commonly, T bills have a maturity of a few weeks to a few months. They are purchased at a discount and then redeemed for par; T bills do not pay interest. For example, an investor may purchase a $5,000 bill for $4,500. While he/she will not earn any coupon payments, he/she will receive $5,000 in no more than a year. They are low-risk, low-return investments. Private investors may purchase T bills in small quantities, but the bulk of the T bill market comes from institutional investors, especially banks. See also: Treasury note, Treasury bond.
References in periodicals archive ?
Source T-ETCs are secured by US Treasury Bills and cash and are designed to track the S&P GSCI family of commodity indices which include broad, sector and individual commodity indices such as cotton, crude oil or sugar.
When Lehman Brothers collapsed every asset except US Treasury bills and gold appeared to carry too much risk
Chinese investments increasingly took the form of official purchases of US Treasury bills. These investments did not create new resources to provide the means of repayment.
This fund investing in short-dated US treasury bills has been established for this cat bond by Munich Re s asset manager MEAG.
China, however, welcomed the US fiscal deal as it will help boost its exports and help it reduce inflationary pressures on Beijing given the Chinese holding in US treasury bills and other investments that will be relatively secure now.
The result is that China and other East Asian countries own a large and growing stock of US Treasury bills. Through financial intermediation, these government securities helped finance the western consumption and speculative boom that collapsed in 2008.
And it was the Chinese who were there to buy up all the US Treasury bills that country needed to fund its extravagant lifestyle.
The issue, which will mature on June 26, 2013, has a coupon of 1.500 percent and spread of 27 basis points or 1.375 percent over the comparable US Treasury Bills, which will mature on May 15, 2013.
The unbalanced relationship between the two trading nations with Chinese funding the acquisition of its goods by the US public through lending of money via purchase of US Treasury Bills is an unsustainable business model.
Holding dollars today represents risk without reward: The returns to US Treasury bills are near zero, and even those most confident in the Federal Reserve must acknowledge the chance that things will not go smoothly.
Having pegged these bonds to US Treasury bills, purchasers receive a US Treasury zero-coupon bond which matures in the year 2020.