BANKING & FINANCE - May 31, 1995

Interest Rates on Treasury Bills Fall: The Treasury Department sold $14.3 billion of new three-month bills at an average discount rate of 5.64%, down from 5.72% last week. Another $14.4 billion of new six-month bills was sold at an average discount rate of 5.61%, down from 5.72%. The three-month bill rate is the lowest since they sold for 5.63% on May 8. The six-month bill rate is the lowest since it averaged 5.51% on Oct. 31. The new discount rates understate the actual return to investors: 5.82% for three-month bills, with a $10,000 bill selling for $9,857.40, and 5.87% for a six-month bill selling for $9,716.40. The discount rate reflects the price discount received when government securities are purchased at less than face value.