BANKING & FINANCE - Dec. 8, 1992

Short-term Treasury Rates Drop: The Treasury Department sold $12.2 billion of new three-month bills at an average discount rate of 3.29%, down from 3.31% last week. An additional $12.3 billion of new six-month bills was sold at an average discount rate of 3.37%, down from 3.46% last week. The three-month bill rate was the lowest since they sold for 3.27% on Nov. 23. The six-month bill rate was the lowest since they averaged 3.31% on Nov. 9. The new discount rates understate the actual return to investors--3.37% for three-month bills with a $10,000 bill selling for $9,916.80 and 3.48% for a six-month bill selling for $9,829.60. The discount rate reflects the price discount received when government securities are purchased at less than face value.