What do Treasury bills represent?

Treasury bills, commonly referred to as T-bills, are short-term government securities that are issued by the U.S. Department of the Treasury. The key characteristic of T-bills is that they are sold at a discount to their face value and do not pay periodic interest like many other types of bonds. Instead, the investor receives the difference between the purchase price and the face value upon maturity, which is where the yield is derived.

T-bills are typically issued in maturities of a few days to one year, making them a popular instrument for short-term investments that generally carry lower risk. Their status as government-backed securities also means they are considered one of the safest investments available. Investors often use T-bills to manage cash positions or as a safe place to park funds for short durations while awaiting other investment opportunities.

In contrast, the other options describe different characteristics that do not apply to T-bills. The nature of T-bills as marketable securities emphasizes their role in efficient capital management and liquidity for investors.