BANKING & FINANCE - Oct. 25, 1994

Short-Term T-Bill Rates Rise: The Treasury Department sold $13.6 billion of new three-month bills at an average discount rate of 5.07%, up from 4.92% last week. Another $13.6 billion of new six-month bills was sold at an average discount rate of 5.51%, up from 5.34%. The three-month bill rate was the highest since they sold for 5.11% on Sept. 30, 1991. The six-month bill rate was the highest since they averaged 5.59% on Aug. 5, 1991. The new discount rates understate the actual return to investors: 5.21% for three-month bills, with a $10,000 bill selling for $9,871.80 and 5.75% for a six-month bill selling for $9,721.40. The discount rate reflects the price discount received when government securities are purchased at less than face value.