Question

Since we are talking about bond yields, I think this would be a wonderful opportunity to look at current events. Take some time and look at bond yields in the news. Since bonds are considered to be a security, there is plenty of information out there. I would like you to choose a bond, it can be one of the US Treasury Bonds or it can even be a Bill or a Note issued by the US Treasury. You can also pick a state bond or a local municipality bond, too. It can also be a bond issued by a company. I will not be too picky about what you choose. But choose a bond, and then tell me a little bit about it. What was it issued for? What is the interest rate on it? Who issued it? Do you see what the purpose of the bond was issued for? How strong do you think the entity is who is issuing the bond? Do you think there is a chance that they may default? Why or why not?

Answer 1

_{I have chosen US treasury 2 year bond:
The quote for the same is:} TMUBMUSD02Y

The bond is issued by United states treasury to meet the government expenditure. Current yield on the bond is 2.599%. Since the bond is issued by US treasury and the treasury has the power to issue notes and is the sole responsible agency for other financial power and responsibilites, it is very less likely to default. The default chances are near to zero.

We can see the graph of yield over last 3 years and we can see that yields have risen as US has seen rising inflation over the same period.