U.S. Treasury Security

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U.S. Treasury Security

A tradable debt security owed by the United States government for a certain stated period. Each note has a stated interest rate which is paid semi-annually. Because the United States is seen as a very low-risk borrower, many investors see Treasury security interest rates (especially 10-year Treasury notes) as indicative of the wider bond market. Normally, the interest rate decreases with greater demand for the securities and rises with lower demand. For example, in December 2008, 10-year interest rates were the lowest in history due to deteriorating economic conditions and the consequent desire of investors for low-risk investments. U.S. Treasury securities are sold in auctions, usually once every few weeks. They are secured by the full faith and credit of the United States government. They should not be confused with U.S. savings bonds, which are not tradable, or indirect government obligations, which are not issued by the U.S. government itself. See also: Yield, Bond, Treasury Bond, Treasury Bill, Treasury Note.
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References in periodicals archive ?
Shareholders of record at February 24, 2012, of the outstanding Notes that are components of the corporate units, and holders of Notes held separately from the Corporate Units who elect to participate in a remarketing, will receive the remaining proceeds, if any, from the remarketing, after decreasing the remarketing fee and, in the case of the holders of Corporate Units, the purchase price of the portfolio of United States Treasury securities to be substituted for the Notes as a component of the corporate units.
Interest rates are set by financial markets and influenced by the sale of United States Treasury securities and vice versa.
"China holds more than $1 trillion in United States Treasury securities, making it highly sensitive to any developments that could lower the value of those holdings," reports the New York Times.
If we consider the defined benefit plan to be an obligation of the United States government and essentially a risk-free asset composed of United States Treasury securities, then the DB plan will be uncorrelated with the market portfolio:

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