The reason of lower interest rates of US (United States) Treasury bills than large-denomination negotiable bank CD s . Introduction: CD s (Certificate of Deposit) refer to a type of time deposit in the financial institutions generally banks which are same as the saving account and have lower risk associated with them. These are generally given or issued by the commercial banks and the permission to access the funds before the date of maturity is not granted. Treasury bills refer to the security which is issued at a discounted rate. They do not give any interest over the amount of its value.

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Chapter 6, Problem 3Q

To determine

The reason of lower interest rates of US (United States) Treasury bills than large-denomination negotiable bank CD_s.

Introduction:

CD_s(Certificate of Deposit) refer to a type of time deposit in the financial institutions generally banks which are same as the saving account and have lower risk associated with them. These are generally given or issued by the commercial banks and the permission to access the funds before the date of maturity is not granted.

Treasury bills refer to the security which is issued at a discounted rate. They do not give any interest over the amount of its value.

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