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 All bonds have some common characteristics, but they do not always have the same contractual features. Differences in contractual provisions, and in the underlying strength of the companies backing the bonds, lead to major differences in bonds risks, prices, and expected returns. It is important to understand how bond markets actually function and what the appropriate terminology is. 

 Questions 

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a. What are some of the factors you should consider when buying a bond?

b. How are Treasury bonds bought?

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