Solution-Interest rate instead of alternative investments

Interest rate instead of alternative investments

Reference no: EM131040214

Back in December 2008 short term Treasury Bills (maturity dates of a few days to one year) were at or near 0% interest. This means that if you purchased a $100,000 90 day T-Bill at the end of 90 days you would receive your $100,000 but that is all you would receive. There were no interest payments, since it was 0% interest-you only received your principle back.

Yet many millionaires and billionaires were purchasing tens of millions of dollars of these short term T-Bills. Explain why people were investing millions of dollars in these T-Bill at a 0% interest rate instead of alternative investments.

Reference no: EM131040214

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Interest rate instead of alternative investments

Reference no: EM131040214

Reference no: EM131040214

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