Future Business Leaders of America (FBLA) Personal Finance Practice Test

In what units are Treasury bills (T-bills) sold?

1. $500

2. $1,000

3. $10,000

4. $50,000

The correct answer is: $1,000

Treasury bills (T-bills) are sold in units of $1,000. This denomination is significant as it reflects the minimum amount one can invest when purchasing T-bills at auction. The structure of T-bills, which are short-term debt instruments issued by the U.S. government, is designed to make them accessible to both individual and institutional investors, facilitating a wide participation in government financing. Investors typically buy T-bills at a discount to their face value, and they are redeemed at maturity for their full face value. This aspect of T-bills further supports the convenience of $1,000 increments, as it simplifies transactions and provides clarity for both small and large-scale investments. The other choices represent amounts that do not align with the standard units for T-bill transactions, making them less relevant for this context.