Treasury bonds have which of the following characteristics?

• A. Maturity longer than 10 years; denominations $1,000 to $100,000; interest paid semiannually; government guaranteed.
• B. Matures in 6 months to 2 years.
• C. Matures in 1 to 5 years.
• D. Issued in denominations of $50,000.

Answer: (A)

Treasury bonds are long-term U.S. government debt instruments. They have maturities longer than 10 years, they pay interest semiannually, and they are backed by the full faith and credit of the U.S. government. They are issued in standard denominations, typically around $1,000 up to higher amounts such as $100,000. Because of the long horizon, semiannual coupon payments, and the government guarantee, the description that matches these characteristics best is the one that lists a maturity longer than 10 years, semiannual interest, and government backing, along with a typical Treasury denomination range. The other options describe shorter maturities or different denomination practices that do not apply to Treasury bonds.