Chapter 3 - Chapter 3 - Overview of Bond Sectors and...

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1 Chapter 3 - Overview of Bond Sectors and Instruments 1. Internal bond market is also called the national bond market and is divided into domestic and foreign bond market 2. External bond market is also referred to as the Eurobond market that is underwritten mainly by an international syndicate 3. US Treasury securities: Bills, Notes, Bonds and TIPS (definition) (Bloomberg) 4. TIPS – Computation of inflation adjustments (Principal and Coupon) 5. Sovereign debt is the obligation of a country’s central government (foreign bonds) 6. Treasury bills are discount securities and have a maturity of one year or less 7. Treasury note is a coupon bearing security which when issued has an original maturity between 2 and 10 years. 8. Treasury bond, similarly, has an original maturity greater than 10 years 9. TIPS are securities whose principal and coupon payments are tied to the CPI 1. Concept of TIPS and the reason for the treasury issuing tips – INFLATION? – p1 10. The most recently auctioned treasury is called the On-the-run. Off-the-run issues are issues that are auctioned prior to the current on-the-run issues
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This note was uploaded on 11/06/2010 for the course ECON Econ taught by Professor Liasa during the Spring '10 term at University of San Francisco.

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Chapter 3 - Chapter 3 - Overview of Bond Sectors and...

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