Bond Markets

How do US Treasury bonds differ from US Treasury notes?

Newly-issued Treasury bonds have a longer term to maturity.

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Treasury bonds pay a fixed coupon, while notes pay a variable coupon.

A bond that repays its face amount ona predefined date

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A fixed rate bond has a price of 104 and a coupon of 5%. The yield-to-maturity of the bond will be:

Less than 5%

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What does DVP refer to?

Delivery versus payment – a settlement procedure

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Can a bond issuer defer payment of coupons?

No, except in exceptional circumstances, to defer coupon payments would be to default

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Why should a bond issuer care about secondary market liquidity?

The absence of secondary market liquidity increases risks to bondholders.

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Other cards in this set

Treasury bonds pay a fixed coupon, while notes pay a variable coupon.

A bond that repays its face amount ona predefined date

A fixed rate bond has a price of 104 and a coupon of 5%. The yield-to-maturity of the bond will be:

What does DVP refer to?

Can a bond issuer defer payment of coupons?

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