The Minimum Tick Size, or Spread Between Prices in the Treasury

question 30

Multiple Choice

The minimum tick size, or spread between prices in the Treasury bond market, is

• A) 1/8 of a point.
• B) 1/16 of a point.
• C) 1/32 of a point.
• D) 1/128 of a point.

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Definitions:

Collection Time

The average period that a company takes to collect cash from its credit sales.

Cheques

A document that is written, dated, and signed, which gives an absolute command to a bank to pay a specific amount of money to the recipient.

Bank Clearing Time

The process and time required for checks and other transactions to be processed through a bank or clearinghouse and the funds to become available.

Processing Time

The time required to complete a particular process, such as manufacturing or data processing.