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Essay / Research Paper Abstract
This 9-page paper discusses U.S. Treasury bills and China's investment in these financial instruments. Bibliography lists 8 sources.
Page Count:
9 pages (~225 words per page)
File: AS43_MTustreasu.doc
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backed by the U.S. government (Treasury Bill, 2011). T-bills are sold in denominations of $1,000 (with a maximum purchase of $5 million) and typically have short maturities ranging from one
month to six months to one year (Treasury Bill, 2011; Treasury Bills, 2011). T-bills are issued through a bidding process at what is
known discount from par - in other words, rather than paying fixed interest rates (as what happens with conventional bonds), the bondholders return comes from the bonds appreciation (Treasury Bill,
2011). Treasury bills represent a loan to the U.S. government (albeit a short-term loan). The U.S. Treasury sells T-bills and other assets in an attempt to bring more money into
the U.S. economy which, in turn, lowers interest rates overall. The result of this (in theory) is more capital borrowing, expansion and so on.
With this brief introduction to treasury bonds, well answer the following questions. Who are the major investors investing in
the US Treasury Bills? The answer to this question can be found in various areas of the U.S. Department of the Treasurys website. If were discussing major foreign holders of
treasury securities, China is in the lead, as it held $1.16 trillion in treasury securities as of December 2010 (Major Foreign Holders of Treasury Securities, 2011). Japan is right behind
China, with $882 billion in holdings as of December 2010 (Major Foreign Holders of Treasury Securities, 2011). This is a great deal of money, certainly, but whats even more interesting
is comparisons as evidenced in the chart below. Country
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