Treasury Bond - T-Bond

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DEFINITION of 'Treasury Bond - T-Bond'

A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest payments semi-annually and the income that holders receive is only taxed at the federal level.

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BREAKING DOWN 'Treasury Bond - T-Bond'

Treasury bonds are issued with a minimum denomination of $1,000. The bonds are initially sold through auction in which the maximum purchase amount is $5 million if the bid is non-competitive or 35% of the offering if the bid is competitive. A competitive bid states the rate that the bidder is willing to accept; it will be accepted depending on how it compares to the set rate of the bond. A non-competitive bid ensures that the bidder will get the bond but he or she will have to accept the set rate. After the auction, the bonds can be sold in the secondary market.

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RELATED FAQS
  1. What is the difference between the Daily Treasury Long-Term Rates and the Daily Treasury ...

    The daily Treasury long-term rates are the arithmetic mean, or average, of closing bid yields on all outstanding fixed coupon ... Read Full Answer >>
  2. How can I create a yield curve in Excel?

    You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields ... Read Full Answer >>
  3. How can the yield curve help me make investment decisions?

    The yield curve is a graphical representation of the relationship between interest rates and the time to maturity of a group ... Read Full Answer >>
  4. How does market risk affect the cost of capital?

    The chief way that market risk affects cost of capital is through its effect on the cost of equity. Companies finance operations ... Read Full Answer >>
  5. What are the risks associated with investing in a treasury bond?

    It's common for financial analysts and investment publications to refer to U.S. Treasury bonds (T-bonds) as risk-free investments. ... Read Full Answer >>
  6. How is risk aversion measured in Modern Portfolio Theory (MPT)?

    According to modern portfolio theory, or MPT, degrees of risk aversion are defined by the additional marginal return an investor ... Read Full Answer >>
  7. Is a treasury bond a good investment for retirement?

    Individuals saving toward retirement use a variety of investments to accumulate funds over time, including stocks, bonds ... Read Full Answer >>
  8. What impact does the Federal Reserve have on a bank's profitability?

    The Federal Reserve impacts a bank's profitability with its influence on interest rates and the money supply. The discount ... Read Full Answer >>
  9. What are the main disadvantages of fixed income securities?

    Fixed-income securities attract investors because they provide guaranteed returns in the form of fixed, regular cash payments. ... Read Full Answer >>
  10. Is market risk premium the same for all investors and investments?

    Each individual investor demands a unique premium for assuming market risk, or a market risk premium. More conservative investors ... Read Full Answer >>
  11. What proportion of my overall investments should be in securities?

    The question of how to allocate your investment capital between stocks, bonds, real estate or other investments cannot be ... Read Full Answer >>
  12. What are the maturity terms for Treasury bonds?

      Treasury bonds reach maturity 30 years after the issue date and pay interest every six months until they reach maturity. ... Read Full Answer >>

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