The rate on a 3 month Treasure Bill is less than 1%. While the rate for a 10 year business loan could be 5% or more. Explain 3 reasons why banks hold substantial amounts of 3 month treasuries despite their much lower rate.
The rate on a 3 month Treasure Bill is less than 1%. While the rate for a 10 year business loan could be 5% or more. Explain 3 reasons why banks hold substantial amounts of 3 month treasuries despite their much lower rate.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![The rate on a 3 month Treasure Bill is less than 1%.
While the rate for a 10 year business loan could be
5% or more. Explain 3 reasons why banks hold
substantial amounts of 3 month treasuries despite
their much lower rate.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbdcf240-8382-4265-9ad8-c6859fa75f80%2Fb6f45cca-ab29-4962-8065-d22da430f296%2Fhpbdwhh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The rate on a 3 month Treasure Bill is less than 1%.
While the rate for a 10 year business loan could be
5% or more. Explain 3 reasons why banks hold
substantial amounts of 3 month treasuries despite
their much lower rate.
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