Give the meaning of ‘Treasury Bill’ and ‘Commercial Bill’ as money market instruments?

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Studies Tanya Dhamija 10 months 1 Answer 56 views Bronze 0

Answer ( 1 )

  1. Treasury bills (T-bills) are short-term notes issued by the U.S. government. They come in three different lengths to maturity: 90, 180, and 360 days. The two shorter types are auctioned on a weekly basis, while the annual types are auctioned monthly. T-bills can be purchased directly through the auctions or indirectly through the secondary market.
    Commercial bills, commonly referred to as “commercial paper,” are unsecured, short-term debt instruments that a corporation or other private organization uses to ensure it has adequate cash on hand to cover operating costs. Commercial bills are typically sold in denominations of $1 million and up. They usually have very short maturities, often maturing overnight, and are typically issued at market interest rates.

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