Economics Bonds Questions Medium
A treasury bond and a treasury security are both types of debt securities issued by the government to finance its operations. However, there are some key differences between the two.
A treasury bond is a specific type of treasury security that has a maturity period of more than 10 years. It is a long-term debt instrument issued by the government to raise funds for various purposes, such as infrastructure development or funding budget deficits. Treasury bonds typically pay a fixed interest rate, known as the coupon rate, to bondholders at regular intervals until the bond matures. At maturity, the bondholder receives the face value of the bond.
On the other hand, the term "treasury security" is a broader category that includes various types of debt instruments issued by the government, including treasury bonds, treasury bills, and treasury notes. Treasury securities are generally considered to be low-risk investments because they are backed by the full faith and credit of the government. They are also highly liquid, meaning they can be easily bought or sold in the financial markets.
In summary, the main difference between a treasury bond and a treasury security is that a treasury bond is a specific type of treasury security with a maturity period of more than 10 years, while treasury security is a broader term encompassing various types of government-issued debt instruments.