Treasury coupon strips, Financial Management

Observed yield on strips can be used to construct an actual spot rate curve, but it is not free from drawbacks. There are some problems with this; first, the liquidity of the strips market is not as much as that of the Treasury coupon market. The second drawback is related to the tax treatment. The tax treatment of strips and treasury coupon is quite different. In strips, accrued interest is taxed even though the investor receives it in cash.

Posted Date: 9/10/2012 3:32:53 AM | Location : United States







Related Discussions:- Treasury coupon strips, Assignment Help, Ask Question on Treasury coupon strips, Get Answer, Expert's Help, Treasury coupon strips Discussions

Write discussion on Treasury coupon strips
Your posts are moderated
Related Questions
Various bond features largely affect the degree of correlation between the bond's prices and the bond's interest rates. Some of the bond feature

When the underlying stock becomes worthless, the percentage price declines the investors experience is given by, Percentage of Downside Risk=

It is a policy feature of permanent life insurance that permits policyholders to left any dividends obtained with the insurer, where the dividends can gain interest. Accumulation o

How can we measure a company's cost of capital in emerging nations, especially when there is no state bond which we could take as a reference? Although there is no state bond w

1.      Consider the following two investment alternatives   Net cash flow   End of year Machine A Machine

Receivables Management The decision on whether to grant or not to grant credit to a particular customer can be taken if certain subjective probabilities of the payment pattern

Critical investment decisions may be taken based on the ratings offered by the credit rating agency. In order to ensure that the rating leads to good investment d

Discuss risk from the perspective of the Capital Asset Pricing Model (CAPM). The Capital Asset Pricing Model, or also known as CAPM, can be employed to calculate the suitable req

Internal Rate of Return (IRR) : This rate attempts to find the earnings rate, which equates the current value of the streams of earnings to the investment outlay. IRR is descri

Q. What do you mean by Shares? Shares: issue of the share is the most important source of the long terms capital. A company can issue various type of the share as the equity an