BANKING & FINANCE - Sept. 27, 1994

Treasury Bill Rates Hit 3-Year High: Interest rates on short-term Treasury securities rose in Monday’s auction to the highest level in three years. The Treasury Department sold $11.7 billion in three-month bills at an average discount rate of 4.79%, up from 4.61% last week. Another $11.6 billion was sold in six-month bills at an average discount rate of 5.22%, up from 5.05%. The three-month bill rate was the highest since they sold for 4.99% on Oct. 28, 1991. The six-month bill rate was the highest since they averaged 5.23% on Sept. 23, 1991. The new discount rates understate the actual return to investors--4.92% for three-month bills with a $10,000 bill selling for $9,878.90 and 5.44% for a six-month bill selling for $9,736.10.