Distinguish between Treasury bills and treasury bonds.

CPA-Financial-Management-Section-3 Revision kit

Treasury Bills
– Short term financial instruments issued by the government to raise short term finance
– Have maturity period of 91 and 182 days
– They are also used to affect government‟s monetary policies
– They are issued at discount and their interest rate is usually called risk free rate since they are near riskless investments for buyers/ investors/ lenders to government
• Treasury bonds –similar to treasury bills only that they are medium/ longtime debt instruments issued by the government. Their maturity period is usually 1 – 5 years.

Leave a Reply

Your email address will not be published. Required fields are marked *