Fixed Income Securities
Zero Coupon Bonds
What is Inflation?
Coupon Rate Bond
Non-Investment Grade Bonds (Unsecured Debentures)
Treasury Securities Definition
Treasury Securities consist of debt instruments that are issued by the U.S. government by the Bureau of Public Debt. The treasury securities market for these instruments is very liquid and often times considered basically risk free because they are backed by the good faith of the United States Government.
Treasury Securities Explained
Treasury securities as said above are very liquid and essentially risk free. They are sold at treasury securities' auctions held by the U.S. government. A treasury security auction is generally held a week after the announcement for a new issuance of securities. There is a large secondary market for them as well where they are traded on a day to day basis. Rates vary from instrument to instrument, and generally in relation to a treasury security's maturity. There are currently four types of these instruments, which are listed as follows from most liquid to least as well as shortest maturity to the longest maturity:
1) Treasury Bills (t bills)
2) Treasury Notes (t notes)
3) Treasury Bonds (t bonds)
4) Treasury Inflation Protected Securities (TIPS)
Note: There is one more type of security that exists from stripping the coupons and principal away from the treasury security as a whole. These treasury securities are known as Treasury STRIPS.