DEFINITION of 'Dollar Bond IndexLinked Securities  Dollar BILS'
A zerocoupon floating rate debt instrument with an interest rate that is determined by the return performance of a specified index over a given time period. The interest rate for dollar BILS is determined at maturity, once the change in the value of the specified index is known.
BREAKING DOWN 'Dollar Bond IndexLinked Securities  Dollar BILS'
Dollar BILS are typically useful for companies engaging in assetliability matching. For example, if a company has a large liability due in six months, the company could invest its cash into dollar BILS now, rather than simply letting the cash sit idle for that time. The effective interest rate the company will receive from holding the dollar BILS will be equal to the return of the specified index during that time period, allowing the company to participate in any gains/losses the index incurs during that time period, but also still guaranteeing that the company will be able to liquidate its position for cash on the date it needs the funds to pay its liability.

Interest Rate Index
An index that is based on the interest rate of a financial instrument ... 
Indexed Rate
An interest rate charged on loans to borrowers that is calculated ... 
Floating Rate Fund
A mutual fund that invests in financial instruments with a variable ... 
Drop Lock
An arrangement whereby the interest rate on a floating rate note ... 
Floating Interest Rate
An interest rate that is allowed to move up and down with the ... 
Closing Range
The band of prices that a security trades at in a specified period, ...

Managing Wealth
All About Zero Coupon Bonds
Zerocoupon bonds are bonds that do not make any interest payments (which investment professionals often refer to as the "coupon") until maturity. For investors, this means that if you make an ... 
ETFs & Mutual Funds
Top 4 Money Market Fund ETFs of 2016 (SHV, NEAR)
Learn about four money market ETFs and why they make safe additions to the shortterm, conservative portion of an investor's portfolio. 
Markets
ZeroCoupon Bond
A zerocoupon bond or ‘no coupon’ bond is one that does not disburse regular interest payments. Instead, the investor buys the bond at a steep discount price; that is, at a price ... 
Managing Wealth
How To Evaluate Bond Performance
Learn about how investors should evaluate bond performance. See how the maturity of a bond can impact its exposure to interest rate risk. 
Managing Wealth
Examples Of Asset/Liability Management
In its simplest form, asset/liability management entails managing assets and cash inflows to satisfy various obligations; however, it's rarely that simple. 
ETFs & Mutual Funds
FLOT: iShares Floating Rate Bond ETF
Explore detailed analysis and information of the iShares Floating Rate Bond ETF, and learn how to use this ETF as a defense against rising interest rates. 
ETFs & Mutual Funds
How Interest Rates Affect Mutual Funds
Find out how changing interest rates impact mutual funds, including bond and money market funds, and how higher rates can discourage investors. 
Markets
How Do I Calculate Yield To Maturity Of A Zero Coupon Bond?
Yield to maturity is a basic investing concept used by investors to compare bonds of different coupons and times until maturity. 
Trading
Managing Interest Rate Risk
Interest rate risk stems from the possibility that an interestbearing assetâ€™s value will change due to changing interest rates. 
ETFs & Mutual Funds
What is an Index?
An index is a statistical means of calculating a change in an economy or market.

How do I calculate the holding period return yield on a zerocoupon bond?
Learn how to calculate the holding period return yield for a zerocoupon bond based on a formula with a relevant example ... Read Answer >> 
How does an investor make money on a zero coupon bond?
Learn about investing in zerocoupon bonds, exactly how they work as an investment vehicle, and their advantages and disadvantages ... Read Answer >> 
What is the difference between a zerocoupon bond and a regular bond?
The difference between a zerocoupon bond and a regular bond is that a zerocoupon bond does not pay coupons, or interest ... Read Answer >> 
What's the difference between EaR, Value at Risk (VaR), and EVE?
Learn about earnings at risk, value at risk and economic value added, how these risk measures are used, and the difference ... Read Answer >> 
Why do interest rates tend to have an inverse relationship with bond prices?
At first glance, the inverse relationship between interest rates and bond prices seems somewhat illogical, but upon closer ... Read Answer >> 
What are the advantages of using an effective interest rate figure?
Understand what is meant by the effective interest rate, and learn why the effective rate calculation is preferred over the ... Read Answer >>