Treasury Bill (Noun)
Meaning
A short-term obligation that is not interest-bearing (it is purchased at a discount); can be traded on a discount basis for 91 days.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The investor purchased a treasury bill at a discount, knowing it would mature in 91 days with a face value higher than the purchase price.
- Treasury bills are often used by governments to finance short-term expenses, as they can be issued with maturities as short as a few weeks.
- The central bank used treasury bills to manage liquidity in the economy by selling them to banks and other financial institutions.
- Investors seeking low-risk investments often turn to treasury bills, which are backed by the full faith and credit of the government.
- The company invested its excess cash in treasury bills to earn a small return while maintaining easy access to its funds.