Top Highlights

• Zero-Coupon Bonds U.S. Treasury bills (commonly known as T-bills) are the most straightforward type of bond. Each T-bill represents a promise by the U.S. government to pay $100 on a fixed future date. There are no coupon payments, which is why T-bills are known as zero-coupon bonds. They are also called pure discount bonds (or just discount bonds),...
• It is (1) a means of payment, (2) a unit of account, and (3) a store of value.
• As economies have become more complex and physically dispersed, reducing the likelihood that a seller will have good information about a buyer, the need for money has grown.
• What matters are the relative prices of goods and services. When the price of one product is higher than the price of another, that product is worth more to both producers and consumers.
• concept—funding liquidity—refers to their ability to borrow money to buy securities or make loans.