A student says: The interest rate on the one-year Treasury bill is currently 0.29%, while the interest
Question:
A student says: “The interest rate on the one-year Treasury bill is currently 0.29%, while the interest rate on the 30-year Treasury bond is currently 3.10%. Why are any investors buying the Treasury bill when they can receive a much higher yield by buying the Treasury bond?” Provide an answer to the student’s question.
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There are several reasons why investors might choose to buy the oneyear Treasury bill Tbill even though the interest rate is lower compared to the 30year Treasury bond Risk Preference and Time Horizon ...View the full answer
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Jehal Shah
I believe everyone should try to be strong at logic and have good reading habit. Because If you possess these two skills, no matter what difficult situation is, you will definitely find a perfect solution out of it. While logical ability gives you to understand complex problems and concepts quite easily, reading habit gives you an open mind and holistic approach to see much bigger picture.
So guys, I always try to explain any concept keeping these two points in my mind. So that you will never forget any more importantly get bored.
Last but not the least, I am finance enthusiast. Big fan of Warren buffet for long term focus investing approach. On the same side derivatives is the segment I possess expertise.
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Related Book For
Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
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