Treasury bills and Treasury
notes are investment securities issued by the U.S. government. A Treasury bill
matures within 1 year, and investors typically roll over the matured Treasury
bill and purchase another Treasury bill the same day. Treasury notes have
maturities of up to 10 years.
You are considering investing
$50,000 in a Treasury bill that you will renew every 6 months, or a Treasury
note that you will hold until maturity. Your investment time frame is 9 years.
Current investment
opportunity interest rates are 5% and are expected to increase to 7% in 6
months. Would you invest in the Treasury bill that you can roll over every 6
months and reinvest in, or leave your money in the Treasury note that will
mature in 9 years? Discuss your reasoning.
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notes are investment securities issued by the U.S. g appeared first on Course Hero.