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Home Categories Fixed Income Trading Strategy & Education Increasing discount refers to an increase in the value of a discount security as it approaches its maturity date. Federal government bonds and government-sponsored corporate bonds pay slightly higher interest rates than US Treasury bonds. Average life is the average length of time it takes to pay off the outstanding principal on a debt instrument, such as a treasury bill, bond, loan, or mortgage-backed security. A baby bond is a bond with a par value of less than $1,000. Barbell is a portfolio strategy with a fixed income, in which half of the investments are short-term instruments, and the other half are long-term. A bearer bond is a physical certificate with coupons attached that is used to pay off interest payments. Treasury bills are issued through an electronic bill auction held by the government every week. The Bond Agreement establishes certain actions to be taken or prohibited by the bond issuer. Bond rating agencies are companies that assess the creditworthiness of both debt securities and their issuers. A bondholder is an investor who purchases bonds issued by an entity such as a corporation or government agency.