Products & Their RisksQuestion 19 of 398
Which U.S. Treasury security is issued at a discount, pays no periodic interest, and has a maturity of one year or less?
a.Treasury note
b.Treasury bond
c.Treasury bill
d.Treasury Inflation-Protected Security (TIPS)
Explanation
Treasury bills mature in one year or less and are sold at a discount to face value, with the investor's return being the difference at maturity rather than periodic coupons. Notes and bonds pay semiannual interest, and TIPS pay interest and adjust principal for inflation.
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