Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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Study for the FBLA Securities and Investments Test. Enhance your financial expertise with well-crafted questions, hints, and detailed explanations. Get exam-ready today!

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How is interest paid on Treasury notes?

Annually
Monthly
Semiannually
Quarterly

The correct answer is: Semiannually

Treasury notes, which are debt securities issued by the U.S. Department of the Treasury, pay interest semiannually. This means that investors receive interest payments twice a year. The interest, referred to as the coupon payment, is a fixed percentage of the face value of the note, and it is paid to holders until the note reaches maturity, at which point the principal amount is returned. The semiannual payment structure is standard for Treasury notes, reflecting their characteristics as mid-term investments ranging from two to ten years. This schedule allows investors to receive consistent income throughout the investment period, making Treasury notes an attractive option for those seeking steady cash flow while holding a low-risk government obligation.