T-Bills, T-Bonds, and More.. What are government securities? T-Bills, T-Bonds, and More. What are the 7 types of bonds? Treasury bonds are issued by the federal government and are considered one of the safest investments available. They are divided into seven types: 1. Treasury bills: These are short-term bonds with maturities of one year or … Read more
A treasury receipt is a document that proves that the holder has paid the government for a treasury bond. The receipt is also proof of ownership of the bond. What is bond term structure? The term structure of bonds refers to the relationship between bond prices and maturity dates. The term structure can be graphically … Read more
Discount houses were institutions that provided loans to traders in the money markets. The loans were short-term and collateralized by the traders’ holdings of government securities. The discount rate was the rate of interest charged on these loans. What are acceptance and discount houses? An acceptance house is a firm that specializes in the business … Read more
A curve steepener trade is an investment strategy that involves buying long-term bonds and selling short-term bonds in order to profit from a rise in interest rates. This trade is based on the premise that long-term rates will rise at a faster pace than short-term rates. To execute a curve steepener trade, the investor must … Read more
A risk-free asset is an asset that has a guaranteed return and no risk of loss. Treasury bonds are often considered to be risk-free assets because they are backed by the full faith and credit of the U.S. government. However, it is important to note that while Treasury bonds are considered to be very safe … Read more
This caused a sell-off in the bond market and a spike in interest rates.. The Taper Tantrum of 2013: What It Is and What Caused It How tapering affects stock market? The Federal Reserve’s Open Market Committee (FOMC) decides on the target federal funds rate. The federal funds rate is the rate at which depository … Read more
“On-the-run” refers to the most recently issued Treasury security in a particular maturity. The yield on on-the-run Treasuries is generally lower than the yield on similar, but older, securities because investors are willing to pay a premium for the liquidity and greater marketability of on-the-run securities. What is G spread? The G spread is the … Read more
Off-the-run Treasury securities are those that are not the most recently issued bonds of a particular maturity. They are typically cheaper than on-the-run securities because they are not as actively traded. How do you calculate run rate savings? Assuming you are asking about the U.S. Treasury market, the run rate savings can be calculated using … Read more
