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.

Indexed Rate
An interest rate charged on loans to borrowers that is calculated ... 
Interest Rate Index
An index that is based on the interest rate of a financial instrument ... 
Closing Range
The band of prices that a security trades at in a specified period, ... 
Drop Lock
An arrangement whereby the interest rate on a floating rate note ... 
Floating Rate Fund
A mutual fund that invests in financial instruments with a variable ... 
Variable Rate Demand Note  VRDN
A debt instrument that represents borrowed funds that are payable ...

Bonds & Fixed Income
ZeroCoupon Bond
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Bonds & Fixed Income
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. 
Investing Basics
Examples Of Asset/Liability Management
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Bonds & Fixed Income
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. 
Investing Basics
Managing Interest Rate Risk
Interest rate risk stems from the possibility that an interestbearing assetâ€™s value will change due to changing interest rates. 
Mutual Funds & ETFs
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. 
Investing Basics
What is an Index?
An index is a statistical means of calculating a change in an economy or market. 
Fundamental Analysis
Calculating Future Value
Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today. 
Fundamental Analysis
What is Present Value?
Present value tells us how much a future sum of money is worth today, given a specified rate of return. This is an important financial concept based on the principle that money received in the ... 
Options & Futures
PrincipalProtected Investments: Risks, Fees And Regulations
Discover if these instruments hit the right note for you.

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?
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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?
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Why do interest rates tend to have an inverse relationship with bond prices?
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What are the advantages of using an effective interest rate figure?
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