The chapter opener noted that in mid-2016, you could earn an interest rate of 0.25% by buying
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The chapter opener noted that in mid-2016, you could earn an interest rate of 0.25% by buying a 3-month Treasury bill or an interest rate of 2.6% by buying 30-year Treasury bond. Briefly explain how the Treasury is able to find buyers for 3-month Treasury bills when investors could earn an interest rate 10 times as high by buying 30-year Treasury bonds.
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Investors may prefer buying shortterm Treasury bills because of their greater liquidity and ...View the full answer
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Related Book For
Money, Banking, and the Financial System
ISBN: 978-0134524061
3rd edition
Authors: R. Glenn Hubbard, Anthony Patrick O'Brien
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