SIE practice questionmediumT-Notes and T-Bonds - Characteristics
Which is true about both U.S. Treasury notes (T-notes) and Treasury bonds (T-bonds)?
- ABoth have principal adjusted for inflation
- BBoth mature in under one year
- CBoth are issued by municipalities
- DBoth pay interest semiannually✓ Correct answer
Explanation
Why D — Both pay interest semiannually
T-notes and T-bonds both pay semiannual interest. T-bills (not notes/bonds) mature in under one year. Only TIPS adjust for inflation. These are U.S. government, not municipal, securities.
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