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BRIEFLY

December 29, 1987

Interest rates on short-term Treasury securities fell to their lowest levels in four weeks. The Treasury sold $6.4 billion in new three-month bills at an average discount rate of 5.73%, down from 5.96% last week. Another $6.4 billion was sold in new six-month bills at an average discount rate of 6.32%, down from 6.48% last week. The rates were the lowest since Nov. 30 when three-month bills sold for 5.49% and six-month bills averaged 6.12%. The new discount rates understate the actual return to investors--5.91% for three-month bills with a $10,000 bill selling for $9,855.20 and 6.64% for six-month bills selling for $9,680.50. The discount rate reflects the price discount received when government securities are purchased at less than face value.

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