Chapter 9, Problem 22AP

To determine

The entry of T-Bills on a bank’s balance sheet

Concept Introduction:

Asset and Liabilities- Something which is owned and has the potential to yield returns is called an asset. For a bank, all loans and security portfolios are its assets. On the other hand, the deposits with the bank which is obliged to repay along with interest is its liability. It has a claim on the assets.

Treasury Bills- They are short-dated government securities which yield no interest but are traded at a price lower than its redemption price. They are commonly referred to as the T-Bills.