BANKING & FINANCE - Oct. 4, 1994

T-Bill Rates Rise to 3-Year High: The Treasury Department sold $12.5 billion of new three-month bills at an average discount rate of 4.92%, up from 4.79% last week. Another $12.4 billion of new six-month bills was sold at an average discount rate of 5.38%, up from 5.22%. 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 5.39% on Sept. 3, 1991. The new discount rates understate the actual return to investors: 5.05% for three-month bills, with a $10,000 bill selling for $9,875.60, and 5.61% for a six-month bill selling for $9,728.00. The discount rate reflects the price discount received when government securities are purchased at less than face value.