Bonds and notes represent corporate, government, and municipal debt. For example, the U.S. government issues Treasury bills, notes, and bonds; these securities are also referred to as T-bills, T-notes, and T-bonds. T-bills have an original issue maturity of 13, 26, or 52 weeks. T-notes mature in 1–10 years, and T-bonds have an original issue maturity of 10–30 years.
Fixed-income instruments are classified according to issuer, maturity, and quality. For purposes of this chapter, we will be covering the highest quality fixed-rate securities, U.S. government obligations.