Final answer:
Option (a), Treasury bills (T-bills) are the U.S. Treasury securities that are issued and traded at a discount. They have short-term maturities and are purchased below face value, with the full face value repaid at maturity.
Step-by-step explanation:
U.S. Treasury Securities Issued at a Discount
Among the different types of U.S. Treasury securities, Treasury bills (T-bills) are the ones issued and traded at a discount. These are short-term securities with maturities of 13, 26, or 52 weeks and are sold at a discount from their face value.
The investors receive the full face value upon maturity, thus earning the difference between the purchase price and the face value as the return on their investment. Unlike T-bills, Treasury notes (T-notes) and Treasury bonds are issued at par value and pay interest semiannually until maturity, where the par value is also repaid. Therefore, the correct security that is issued and traded at a discount is a. Bills.