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L.1 · INTERMEDIATE · 2 MIN

Treasury Securities Essentials

U.S. Treasury securities are the foundation of global finance. Considered virtually default-free, they set the baseline interest rate for everything else.

Quiz · 5 questions ↓
§ 01
SecurityMaturityInterestUsed For
T-Bills4 weeks to 1 yearSold at discount, no couponCash management, money market funds
T-Notes2 to 10 yearsSemi-annual couponBenchmark for mortgages and corporate bonds
T-Bonds20 to 30 yearsSemi-annual couponLong-term pension and insurance portfolios
TIPS5, 10, or 30 yearsInflation-adjusted principalInflation protection
§ 02

The 10-year Treasury yield is the single most important number in finance. It sets the discount rate for stocks, the base rate for mortgages, and the benchmark for corporate borrowing costs.

§ 03
Check the **yield curve** in the Markets view. Find the current 10-year Treasury yield and compare it to the 2-year.
§ 04

Treasury yields are the risk-free rate. Every other investment must offer more than this to justify taking additional risk. When Treasury yields rise, all other asset prices adjust.

§ 05
Why are Treasury securities considered the 'risk-free' rate benchmark?
Five questions · AI feedback

Sit with the ideas.

A 10-year Treasury note has a 3.25% coupon. The last coupon paid 90 days ago, and there are 183 days between coupon dates. The clean price is 101-08 (101 + 8/32 = 101.25). What is the approximate dirty price per $100 face?

Why:
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