FI- U.S. Treasury Securities

What are the five types of treasury securities

Treasury Bills

Treasury Notes

Treasury Bonds

TIPS

FRNS

What’s floating rate notes

2 year, fixed principal notes that pay variable interest quarterly

How does treasury sell in the primary market

Currently sold through sealed bid, single price audition

what’s stop out yield

stop yield is the highest yield accepted of treasury bids. Final coupon rates are set in increment of 1/8 (0.125%)

what does t bills quoted on discount basis mean

When Treasury bills (T-bills) are quoted on a discount basis, it means they are sold at a price lower than their face (par) value. Instead of paying periodic interest, T-bills are issued at a discount and mature at their face value. The difference between the purchase price and the face value represents the interest earned by the investor.

The formula of T bill quoting convention

((F-P)/F)*(360/t)

STRIPS

STRIPS stands for Separate Trading of Registered Interest and Principal of Securities. They are a type of zero-coupon bond created by separating the interest payments (coupons) from the principal of a Treasury bond or note