Fixed Income Securities: Homework 1
Professor Matthias Fleckenstein
Problem 1
• What are the differences between Treasury bills, Treasury notes, and
Treasury bonds?
Problem 2
• For a Treasury auction what is meant by i) noncompetitive bidder and
ii) competitive bidder?
Problem 3
• For a Treasury auction what is meant by i) offering amount, ii) noncompetitive amounts tendered, and iii) competitive amounts tendered?
Problem 4
• For a Treasury auction what is meant by the "high yield" or "stop-out
yield"?
Problem 5
• What amounts do bidders whose bids are higher than the high yield
receive in the auction?
Problem 6
• What happens when competitive bidders bid the high yield and the
amount left to be allocated to them is less than what these bidders
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bid for? For example, suppose that $4 billion was tendered for at the
high yield but only $3 billion remains to be allocated after allocating
to all bidders who bid lower than the high yield.
Problem 7
• In a Treasury auction, how is the price that a competitive bidder must
pay determined?
Problem 8
• In a Treasury auction, how is the price that a noncompetitive bidder
must pay determined?
Problem 9
• What is the "When-issued Market"?
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