Question: Unit 7 Discussion Treasury Bills versus Treasury Notes and Changes in Interest Rates The daily market transactions for treasury instruments are in the billions. The

Unit 7 Discussion

Treasury Bills versus Treasury Notes and Changes in Interest Rates

The daily market transactions for treasury instruments are in the billions. The current average daily volume of Treasuries is approximately $150 billion. Like you, corporations may have extra cash to invest. In this case, you, as a finance manager, are considering investing $50,000 in either a Treasury bill that you will renew every 6 months or investing in a 5-year Treasury note that you will hold until maturity. Current interest rates are expected to increase.

Would you invest in the Treasury bill or Treasury note? Discuss your reasoning.

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