Abstract
Long-term instruments, including most treasury bonds and notes, federal agency bonds, corporate bonds, and municipal term bonds, are generally quoted on a dollar price basis, as a percent of par. Treasuries are quoted as a percent of par, frequently with the 32s after a decimal point. Almost all bonds are traded in a dealer market. An active market exists in treasury bonds, with active bids and offerings in most treasury securities. Some long-term municipal bonds, when-issued treasuries, and a very few others are quoted in a yield basis. Discount instruments are usually quoted on a yield basis. Treasury separately traded interest and principal securities (STRIPS) and municipal zero coupon bonds are quoted in bond yield. For STRIPS, the actual bond price is also usually given at the same time. STRIPS are treasury obligations, either notes or bonds that are split into their separate interest and principal payments and sold as zero-coupon instruments. The treasury does not create STRIPS.
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