Question

can you show and explain the relationship between 30 day tbill and 10 year treasury bond.

Answer 1

Treasury Bill

Treasury Bills or T-Bills are one of the three fixed-income securities offered to consumers and investors by the federal government. T-Bills stand out in terms of having the shortest term (< 1 year). They're issued with maturity dates set of four, eight, 13, 26, and 52 weeks.

Treasury Bond

Treasury bonds or T-bonds are referred to as long bonds for having the longest maturity period (upto 30 years). They also pay the highest interest rates due to long terms of investment

Similarities

Both bills and bonds have the reputation of being based on the full faith and credit of the government. Investors/consumers can expect a high degree of safety and a steady profit.

Differences

Differences	T-Bills (30 days)	T-Bonds (10 years)
Duration/Tenure	Less than one year	Greater than 2 years (upto 30 years)
Coupan Rate	Do not pay any coupan rate. Are issue at discounts to the face value instead.	Highest coupan rate. Usually paid quarterly or half-yearly.
Tax charges	None for issued by both government and corporates	None for the ones issued by government but applicable for the ones issued by corporates
Risk	No risk whether issued by the government or corporates	No risk when issued by the government but default risk when issued by the corporates.