A Government Security Issued in Minimum Units of $100 with Maturities

question 24

Multiple Choice

A government security issued in minimum units of $100 with maturities that are one year or less is called a:

• A)subordinated bond.
• B)Treasury bill.
• C)Treasury note.
• D)Treasury bond.
• E)savings bond.

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Definitions:

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a period of time, usually expressed as a percentage.

Annual Coupon Rate

An alternative term for Coupon Rate, representing the yearly interest payment made by bonds relative to their face value.

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.

Interest Rate Risk

The potential for investment losses that result from a change in interest rates, affecting the value of fixed-income securities inversely to the direction of the rate change.