Treasury bills versus treasury notes and changes

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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.

Reference no: EM131401748

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