Asked by Chasity Fields on May 10, 2024
Verified
The bid price of a T-bill in the secondary market is
A) the price at which the dealer in T-bills is willing to sell the bill.
B) the price at which the dealer in T-bills is willing to buy the bill.
C) greater than the asked price of the T-bill.
D) the price at which the investor can buy the T-bill.
E) never quoted in the financial press.
Bid Price
The price at which a dealer is willing to purchase a security.
T-bill
Short-term debt obligations issued by the U.S. government, known for their safety and liquidity, typically maturing in one year or less.
Secondary Market
A marketplace where previously issued financial instruments such as stocks, bonds, options, and futures are bought and sold.
- Highlight the constituents and mechanisms in the money market.
Verified Answer
CF
Catherine FarleyMay 14, 2024
Final Answer :
B
Explanation :
The bid price of a T-bill in the secondary market is the price at which the dealer is willing to buy the bill. This contrasts with the ask (or offered) price, which is the price at which the dealer is willing to sell the bill to an investor.
Learning Objectives
- Highlight the constituents and mechanisms in the money market.
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