1.Which of the following is a difference between an on-the-run and an off-the-run issue? An on-the-run issue:

A)    is the most recently issued security of that type.

B)    tends to sell at a lower price.

C)    has a shorter maturity than an off-the-run issue.

D)    is publicly traded whereas an off-the-run issue is not.

2.Consider four U.S. Treasury notes that were outstanding on November 30, 2006:

(Source: Monthly Statement of the Public Debt, U.S. Department of the Treasury)

The market price of which of these notes most likely provided the best information about current 3-year Treasury yields as of November 30, 2006?

A)    Series M.

B)    Series N.

C)    Series P.

D)    Series U.

答案和详解如下：

1.Which of the following is a difference between an on-the-run and an off-the-run issue? An on-the-run issue:

A)    is the most recently issued security of that type.

B)    tends to sell at a lower price.

C)    has a shorter maturity than an off-the-run issue.

D)    is publicly traded whereas an off-the-run issue is not.

The correct answer was A)

An on-the-run issue is the most recently auctioned Treasury issue. An off-the-run issue older issues, when more current issues are brought to market.

2.Consider four U.S. Treasury notes that were outstanding on November 30, 2006:

Series	Interest Rate	Issue Date	Payable	Amount Outstanding ($ mil.)
M	3.375	9/15/04	9/15/09	15,005
N	3.375	10/15/04	10/15/09	15,005
P	3.500	11/15/04	11/15/09	18,752
U	4.625	11/15/06	11/15/09	24,773

(Source: Monthly Statement of the Public Debt, U.S. Department of the Treasury)

The market price of which of these notes most likely provided the best information about current 3-year Treasury yields as of November 30, 2006?

A)    Series M.

B)    Series N.

C)    Series P.

D)    Series U.

The correct answer was D)

Series U, the most recently issued note, was the on-the-run 3-year Treasury note as of November 30, 2006. Market prices of on-the-run issues provide better information about current market yields than off-the-run issues because of their higher liquidity and because their values are often closer to par.