What are the interest rates for Treasury Bonds for the 5, 10, and 30 year bonds?

Question

What are the interest rates for Treasury Bonds for the 5, 10, and 30 year bonds? What factors play into the interest rates for Treasury Bonds? Pick a municipality and find the rates it provides for municipal bonds? What factors play into the interest rates for Municipal Bonds? Is the rate higher or lower that Treasury Bonds? Why? What factors play into the interest rates for Municipal Bonds at Wells Fargo? What factors play into the rate difference between corporate bonds and other types of bonds?

Explanation / Answer

1)

The interest rates for Treasury bond for 5,10, 30 year bonds are ;

The coupon rate determines the interest payments. The 2.75 percent is the annual coupon

2)

Factors that play into the interest rates for treasury bonds are as follows :

1. the face value of the security,

2. how much the security was purchased for

3. maturity period of the security.

Many external factors influence Treasury prices and yields, such as the monetary policy of the Federal Reserve and the perceived health of the economy.

3)

Municipal bonds are debt instruments—a promise to repay a fixed principal amount with interest periodically, which can be paid at fixed intervals or at the end of the tenure, with the principal.

For instance, the coupon rate for Pune municipal bonds was 7.50% semi-annual. In the case of the Pune municipal bonds, the money collected will be used to provide uninterrupted municipal water supply in the city.

The municipal bonds that are set to be seen in the market, will be used for the government’s smart cities project. The project aims to improve 100 cities, by the year 2020, in terms of facilities such as water supply and transportation.Typically, municipal bonds have a tenure of more than 5-7 years.

4)

The main factors that impact the interest rates for government bonds are interest rate changes, default or credit risk, and secondary market liquidity risk.

The other factors are as follows :

Credit Ratings • Supply of Bonds in the Market • Economic News • Political and Geopolitical Events • Federal Legislation and Policy • Investor Preferences • Demand on Pricing Day

5) The interest rate is higher for the municipal bonds are compared to treasury bonds.

Municipal bonds are typically fixed-rate coupon bonds or zero-coupon bonds. Municipal bonds typically have higher yields than the after-tax yields of Treasurys, reflecting higher credit risk and lower liquidity.

coupon rate Yield 5 year 2.75 2.79% 10 year 2.88 2.92% 30 year 3.13 3.04%

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