Which of the Following Is True of Treasury Bills

question 51

Multiple Choice

Which of the following is true of Treasury bills?

• A)Interest on Treasury bills is not exempt from state income taxes.
• B)Interest on Treasury bills is exempt from federal income taxes.
• C)Treasury bills pay a lower pre-tax yield than comparable corporate securities.
• D)All the options are true.
• E)None of the options is correct.

---

Definitions:

Maturity Value

The amount that will be received at the maturity date of an investment, including the principal and any accrued interest.

Future Value

The value of an asset or cash at a specified date in the future calculated based on assumed rate of growth or interest.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Future Value

The value of an investment at a specific future date, accounting for interest or returns earned over time.