nsider the following two Treasury securities: Bond Price Modified duration (years) A $100 6 B $80 7   For a 25 basis-point change in interest rates, what is the percentage change in price for Bond A?   A. -2.00%   B. -1.50%   C. 3.00%   D. 3.50%

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.