Understanding Bonds
Commercial Papers and Treasury Bonds Treasury Bills Treasury bills are short-term Government debt securities with maturity of a period less than one year. They are the most well known of all Government securities.Treasury bills are designated by the number of days to their maturity. The ones that have been issued in the market include the following: 30 days 60 days 91 days 182 days 270 days 364 days The accrued interest The relative change in market interest rates The change in the credit quality of the bond The relative supply and demand for the bonds Availability of credit in the market. Accrued Interest If, after a bond is; issued, interest rates should rise, then the market value of the bond fails. If, on the other hand, interest rates go down, the market value of the bond rises. Coupon yield: This is the yield expressed as a percentage that the issuer pays on the bond’s face value. Current yield: This is the yield, expressed as a p