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Unformatted text preview: Bid Price= Par Value- Bid yield Discount in Dollars Bid Yield Discount in Dollars= Par Value x Discount Rate (as Decimal) x Remaining Days to Maturity. Dealers Spread= Dealers Ask Price- Dealers Bid Price T-bills are issued by the government to cover deficits and to refinance maturing government debt. Unlike T-Bills; T-Notes and T-Bonds are coupon instruments. Credit Enhancements lower costs to issuers and default risk to investors. Capital Markets can be either debt or equity; all money markets instruments are debt securities. Tax exempt bonds the before tax return equals the after tax return. When Interest rates are low people refinance their mortgages....
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- Spring '08