SIE practice questionmediumT-Bills vs T-Bonds
What is a key difference between Treasury bills (T-bills) and Treasury bonds (T-bonds)?
- AT-bills pay interest every six months
- BT-bills mature in one year or less; T-bonds mature in more than 10 years✓ Correct answer
- CT-bonds have no default risk while T-bills do
- DT-bills are only sold to institutions
Explanation
Why B — T-bills mature in one year or less; T-bonds mature in more than 10 years
T-bills have maturities of one year or less and are sold at a discount. T-bonds mature in over 10 years. Both are default-free and available to all investors.
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