SIE Treasury Securities: Bills, Notes, Bonds, TIPS — and How the Auction Works

Two bidders enter the same Treasury auction. One states a rate. The other states no rate at all -- and is filled first, in full, before the first bidder is even considered. Which one got the better price? This lesson places every Treasury instrument by its term and its payment, walks the auction Treasury's own regulation performs, and prices a note quoted in 32nds. Free practice for this section, every wrong answer explained: https://indepthacademics.com/sie/unit... Full playlist: SIE Section 2A — Equity & Debt Securities. Chapters: 0:00 One Issuer, Three Instruments 3:26 TIPS, STRIPS and the Auction 6:26 Quotes, Tax and the Trap 9:28 Check Yourself, Then the Sheet Covered in this lesson (FINRA SIE Content Outline © 2025, §2.1.2): • Treasury bill — 4, 6, 8, 13, 17, 26 and 52 weeks; no coupon; sold “at a discount or at par (face value)” and redeemed at face value • Treasury note — 2, 3, 5, 7 or 10 years; Treasury bond — 20 or 30 years; both pay a fixed rate every six months • TIPS — 5, 10 or 30 years; the principal adjusts with inflation and deflation, so the payment varies even though the coupon rate never does • The TIPS maturity floor: repayment cannot fall below the original principal, even after cumulative deflation • STRIPS — zero-coupon components of eligible notes, bonds and TIPS, bought only through financial institutions and government securities dealers • The Treasury auction award order: non-competitive bids accepted in full first, then competitive bids from the lowest yield up, all at one clearing price (31 CFR 356.20(a)(1), 356.2) • The two 35% rules that are not the same rule -- one trims an oversized bid, the other caps the award (31 CFR 356.12(c)(2), 356.22(b)) • Quoting in 32nds -- why 98:16 is 98.5% of par, not $98.16 (Federal Reserve Trading and Capital-Markets Activities Manual §4020.1) • The state and local tax exemption, and its two exceptions (31 U.S.C. §3124(a)) • The auction trap: being filled first does not mean a better price -- it's a single-price auction Two exam-style questions with every distractor explained. Sources: FINRA SIE Content Outline © 2025; 31 CFR Part 356 (Uniform Offering Circular); 31 U.S.C. §3124(a); TreasuryDirect; Federal Reserve Trading and Capital-Markets Activities Manual §4020.1. All read this session. FINRA®, the SEC and the SIE® exam names referenced are the property of their respective regulatory bodies. This channel is independent -- not affiliated with, sponsored by, or endorsed by FINRA or the SEC. It exists to help candidates prepare for the exam. #SIEExam #FINRA #TreasurySecurities Chapters: 0:00 One Issuer, Three Instruments 3:29 TIPS, STRIPS and the Auction 6:30 Quotes, Tax and the Trap 9:33 Check Yourself, Then the Sheet