1. Treasury Bonds Is it true that a U.S. Treasury security is risk-free?
2. Interest Rate Risk Which has greater interest rate risk, a 30-year Treasury bond or a 30-year BB corporate bond?
3. Treasury Pricing With regard to bid and ask prices on a Treasury bond, is it possible for the bid price to be higher? Why or why not?
4. Yield to Maturity Treasury bid and ask quotes are sometimes given in terms of yields, so there would be a bid yield and an ask yield. Which do you think would be larger? Explain.
5. Coupon Rate How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond