Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
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by Robert Hashemian

Page 18

gauge the relative strength of the bond market and the general interest rates levels. (Note: the 10-year note has recently gained attention as a possible candidate to dethrone the long bond as a viable benchmark)

Sample US Treasury Bond Quote

CUSIP: 912810DN5 Callable: 11/09@100
Type: Treasury S&P / Moody: AAA / Aaa
Coupon: 11.75 Frequency: Semi-annual
Maturity: 11/15/2014 First Coupon: 05/15/1985
Bid Price: 135.754 Bond Settlement: 02/28/2000
Bid Yield to Maturity: 7.655 Next Coupon: 05/15/2000
Offer Price: 136.254 Dated: 11/15/1984
Offer Yield to Maturity: 7.609 Last Coupon: 05/15/2014

Inflation-Indexed Notes - These are newly introduced securities available in 10-year maturities and designed to offset inflation devaluation effect on the investment. Interest payments (coupon payments) are made semiannually, and the principal is payable at maturity. The difference here is that the interest payments and the final principle payment are adjusted for inflation, sheltering the investor from the ravages of inflation. (We cover inflation in an upcoming section.)

Technically, the Federal Reserve can carry out its open market operations using any type of asset. In practice, however, most types of assets cannot be traded readily enough to accommodate open market operations. Therefore the Fed must rely on highly liquid securities (liquid means that there is a high enough demand that it can be quickly


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    Table of Contents Copyright and Disclaimer Foreword Money
    Bonds Futures Stocks Options
    Mutual Funds Retirement Final Words Appendix A

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