Treasury bills have all of the following characteristics EXCEPT:

Treasury bills, or T-bills, are short-term government securities that are issued by the U.S. Department of the Treasury to finance national debt. They are typically sold at a discount and do not pay interest in the traditional sense; rather, the yield comes from the difference between the purchase price and the value at maturity.

The correct answer indicates that T-bills may be purchased through various means, not solely from the Federal Reserve Bank (FRB) by competitive tender. Investors can buy T-bills directly from the Treasury through non-competitive tenders, which allows them to submit bids without needing to specify the yield, ensuring they will receive the T-bills.

In terms of other characteristics: T-bills are quoted on a discount yield basis, which shows their yield as a percentage of the face value, and they are exempt from state taxes, making them attractive to investors looking to minimize tax liabilities. The bidding process typically results in a higher bid than the offer in competitive auctions due to the nature of supply and demand dynamics in the market.