Australian 3 Year Treasury Bond

What is the Australian 3 Year Treasury Bond?

An Australian 3 year Treasury bond, is a contract over 3 years that is issued by the Australian government. It is considered a benchmark interest rate. Treasury bonds are considered to be one of most highly traded long term debt securities.

Uses of Australian 3 Year Treasury Bond

This bond rate is used not only for a return on the face value, but also as a form of hedging against the Australian dollar interest rates. Bonds are capable of hedging and can be done via a futures contract.

Risks of Australian 3 Year Treasury Bond

There are a number of risks that can apply to bonds. These can include, but not limited to:

  • Inflation risk - this is when the inflation rate increases to a larger rate than which the bond in returning
  • Reinvestment risk - this is when the issuer recalls the bond prior to the maturity date

Home

Search

Login

Report a bug