U.S. Treasury Securities
Chapters in this video
- 0:00 Carla, Riley, and the $100 minimum purchase trap
- 1:46 T-bills: discount instruments with no coupon
- 3:01 T-notes: semiannual coupons and the 10-year benchmark
- 3:57 32nds-of-par quotation math for notes and bonds
- 5:02 T-bonds: longest maturity and greatest interest rate risk
- 6:06 Federal taxable, state and local exempt across all Treasuries
- 6:44 Shared DNA: OTC, book-entry, actual/actual, zero default risk
- 7:19 The grand summary table and rapid-fire exam recap
What this video covers
- Why the minimum purchase for all marketable Treasuries is $100 (not $1,000) and the dollar-increment rule
- How T-bills function as zero-coupon discount instruments with no semi-annual interest, and why exam questions calling that "interest" are traps
- The maturity ranges that separate Treasury bills, notes, and bonds, and why the 10-year T-note yield anchors all long-term interest rate benchmarks
- How Treasury notes and bonds are quoted in 32nds of par, and how to convert quotes like 99-16 or 101-08 into percentage-of-par values
- Why T-bonds carry the greatest interest rate risk and price volatility of any Treasury security
- The federal taxable, state and local exempt tax treatment that applies uniformly across all three marketable Treasury types
- The shared characteristics of Treasuries: over-the-counter (OTC) trading, book-entry form only, actual/actual day-count basis, and zero default risk
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. When you're ready to drill the topic, the full Series 7 course adds adaptive practice questions and spaced-repetition flashcards.
Start on this site: free Series 7 practice questions · Series 7 pass rate