Series 7 Exam Question 166: Answer and Explanation

Question: 166

Which of the following U.S. government securities are quoted on a discount yield basis?

• A. Treasury bills
• B. Treasury bonds
• C. Treasury notes
• D. Both A and C

Correct Answer: A

Explanation:

A. Treasury bills, or T-bills, are short-term U.S. government debt securities that are issued at a discount and mature at par value. Since T-bills don't make interest payments, they are issued at a discount yield basis instead of a percentage of the dollar price.