Fixed Income【Reading 55】Sample
Often central governments will announce auctions to issue new bonds when they believe prevailing market conditions appear most suitable. At the time of the auction, the amount to be auctioned and the maturity of the security to be offered are announced. This method of distributing new government securities is called: A)
| an ad hoc auction method. |
| B)
| a regular auction cycle / single-price method. |
| |
An ad hoc auction system is a method in which a central government distributes new government securities via auction when it determines that market conditions are advantageous. |