BANKING & FINANCE - Sept. 26, 1995

T-Bill Interest Rates Mixed: Interest rates on short-term Treasury securities were mixed at auction. The Treasury Department sold $11.4 billion in three-month bills at an average discount rate of 5.14%, down from 5.25% last week. Another $11.4 billion was sold in six-month bills at an average discount rate of 5.27%, up from 5.22%. The three-month bill rate was the lowest since they sold for 5.07% last Oct. 31. The six-month rate was highest since they averaged 5.33% on Sept. 11. The new discount rates understate the actual return to investors--5.29% for three-month bills with a $10,000 bill selling for $9,870.10 and 5.50% for a six-month bill selling for $9,733.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 5.57% last week from 5.59% the previous week.