SIE Exam Question 940: Answer and Explanation

Question: 940

____ Treasury bonds

• A. Freely traded in the secondary markets; yield and term are determined at the time of purchase.
• B. Pay a fixed rate of interest every six months until maturity; issued in terms of ten years or more.
• C. Can be redeemed at any time without penalty; objective is to earn interest for shareholders.
• D. Unsecured promissory note issued by corporations with a fixed maturity of up to 270 days.

Correct Answer: B

Explanation:

Treasury bonds pay a fixed rate of interest every six months until maturity. They are issued in terms of ten years or more.