The nation of Qatar just issued a perpetual bond. The bond will pay $1,000 in one year and that will grow at 1%/year forever. Because Qatar has more natural gas than any nation in the world, it is a very safe investment and the appropriate discount rate is 4%. Under these facts, what is the appropriate price for this perpetual bond? Choose the closest. a. $20,000 b. $25,000 c. $33,333 d. $50,333

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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.