treasury-bond

Vocabulary Word

Definition

A 'treasury bond' is a type of investment where you lend money to the government. In return, the government promises to pay you back with interest after a certain amount of time. This is a safe way to grow your money over time.

Examples in Different Contexts

In finance, a treasury bond is a long-term government debt security with a fixed interest rate, repaid over a period typically exceeding ten years. An investment advisor might say, 'Treasury bonds are considered a safe investment, ideal for conservative portfolios seeking steady income.'

Practice Scenarios

Economics

Scenario:

The central bank's recent policy changes seem to be geared towards inflation control. What do you think will be the effect on government securities?

Response:

If the central bank's policies lead to higher interest rates, this could boost the yield on government securities like treasury bonds.

Business

Scenario:

The bond market seems quite volatile recently. Do you think this could affect our company's borrowing costs in the short term?

Response:

If the treasury bond yields continue to increase, we may see an uptick in borrowing costs. However, the impact might not be immediate.