Also known as T bills
Typically money market instruments are sold at a discount.
For example lets imagine a 1 year US Treasury bill, value $100, sold by auction.
A dealer may bid $94. If accepted they pay $94 and 1 year later they receive $100 from the government.
They discounted the $100 treasury bill by 6% and now earn $6 for investing $94 which is 6.38%.
Thus the market refers to the discount rate and the resulting yield.
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