A US Government Security Issued in Minimum Units of $100 with with a 30-Year

question 31

Multiple Choice

A U.S. government security issued in minimum units of $100 with a 30-year maturity is called a

• A) Subordinated bond.
• B) Treasury bill.
• C) Treasury note.
• D) Treasury bond.
• E) Savings bond.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for instruments of similar risk and maturity.

Contract Rate

The predetermined fee or rate agreed upon in a contract for services rendered or goods sold.

Bonds

Long-term debt securities issued by corporations or governments to raise capital, paying interest to holders.

Premium

A term that records the sale of stock at more than par value. In this book we use the account Paid-In Capital in Excess of Par to record the premium received.