Treasury Bills versus Treasury Notes and Changes in Interest Rates

Need by 03 Nov 2015 2300hrs EST in 300-400 words

The daily market transactions for treasury instruments are in the billions. The current average daily volume of “Treasuries” is approximately $150 billion. Like you, corporations may have extra cash to invest. In this case, you, as a finance manager, are considering investing $50,000 in either a Treasury bill that you will renew every 6 months or investing in a 5-year Treasury note that you will hold until maturity. Current interest rates are expected to increase.

• Would you invest in the Treasury bill or Treasury note? Discuss your reasoning.

References:

Parrino, R., Kidwell, D. S., Bates, T. (09/2014). Fundamentals of Corporate Finance, 3rd Edition. [VitalSource Bookshelf Online]. Retrieved from http://kaplan.vitalsource.com/#/books/9781118901656/  

Need by 03 Nov 2015 2300hrs EST in 300-400 words