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Treasury Bill
Term category: Bonds
In 10 words or less:  A form of government debt that is often referred to as the "risk-free rate."

Definition: A short-term debt obligation issued by the government to finance government activities.  These are commonly referred to as "T-Bills."  They are usually issued in maturities of one, three, or six months.

Advice: T-bills are zero-coupon bonds, which mean that they don't pay out interest.  Instead, an investor buys them at a discount to their par value and earns the difference.

 



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