Which of the following statements is FALSE?
A)In the case of a Treasury note or Treasury bond offering,the stop-out yield determines the coupon of the bond and then all bidders pay the discounted value for the bond or note.
B)All competitive bidders submit sealed bids in terms of yields and the amount of bonds they are willing to purchase.
C)In the past,the Treasury has issued bonds (often called long bonds)with maturities of 30 years and 20 years.
D)Noncompetitive bidders (usually individuals)just submit the amount of bonds they wish to purchase and are guaranteed to have their orders filled at the auction.

Question

Quizplus · Accepted Answer

The stop-out yield is not used to determine the coupon of the bond. Instead, the Treasury sets the coupon rate before the auction based on market conditions. The stop-out yield is the lowest yield accepted from the competitive bidders at the auction.

Which of the Following Statements Is FALSE