Are T-bill rates annualized?
Understand the Problem
The question is asking whether the interest rates for Treasury bills (T-bills) are presented on an annualized basis, which means showing the rate as if it were earned over a year, regardless of the actual duration of the T-bill.
Answer
Yes, T-bill rates are annualized.
The final answer is yes, T-bill rates are annualized.
Answer for screen readers
The final answer is yes, T-bill rates are annualized.
More Information
T-Bills, or Treasury Bills, are sold at a discount from their face value and do not pay interest before maturity. The yield of a T-Bill is indeed quoted on an annualized basis to allow for easier comparison with other financial instruments.
Tips
Make sure not to confuse the T-bill discount with the annualized rate when comparing to other types of investments.
Sources
- Are 3-month T-bill Rates on FRED Annualized? - Quant Stack Exchange - quant.stackexchange.com
- How to Read A T-Bill Quote - Investopedia - investopedia.com
- Want a risk-free 5% return? How to buy a 3-month Treasury - CNBC - cnbc.com
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