When arranged from shortest to longest maturity, which Treasury securities would appear in order?

When arranged from shortest to longest maturity, which Treasury securities would appear in order?

• A. T note, T bond, T bill
• B. T bond, T note, T bill
• C. T bill, T note, T bond
• D. T bill, T bond, T note

Answer: (C)

Treasury securities are categorized based on their maturity lengths, which is crucial for understanding their characteristics and investment purpose. Treasury bills (T-bills) have the shortest maturity, typically ranging from a few days to a year. They are sold at a discount and do not pay interest, making them a short-term investment option for those looking for liquidity. Treasury notes (T-notes) have a medium-term maturity, usually ranging from two to ten years. They pay interest semiannually and are favored by investors seeking a balance between return and risk over a longer period than T-bills. Treasury bonds (T-bonds) have the longest maturity, generally ranging from ten to thirty years. They also pay interest semiannually and are intended for long-term investment, providing a steady income stream over a significantly extended time frame. When these securities are arranged by maturity from shortest to longest, T-bills come first, followed by T-notes, and finally T-bonds, establishing the order as T-bill, T-note, T-bond. This understanding is critical for evaluating Treasury securities and their appropriate use based on investment horizons and liquidity needs.

Treasury securities are categorized based on their maturity lengths, which is crucial for understanding their characteristics and investment purpose.

Treasury bills (T-bills) have the shortest maturity, typically ranging from a few days to a year. They are sold at a discount and do not pay interest, making them a short-term investment option for those looking for liquidity.

Treasury notes (T-notes) have a medium-term maturity, usually ranging from two to ten years. They pay interest semiannually and are favored by investors seeking a balance between return and risk over a longer period than T-bills.

Treasury bonds (T-bonds) have the longest maturity, generally ranging from ten to thirty years. They also pay interest semiannually and are intended for long-term investment, providing a steady income stream over a significantly extended time frame.

When these securities are arranged by maturity from shortest to longest, T-bills come first, followed by T-notes, and finally T-bonds, establishing the order as T-bill, T-note, T-bond. This understanding is critical for evaluating Treasury securities and their appropriate use based on investment horizons and liquidity needs.