The difference between the yield on an on-the-run Treasury security and a comparable maturity off-the-run security is
A) The on-the-run yield is higher
B) The on-the-run yield is lower
C) Their yields are the same
D) The on-the-run yield is exempt from the Fisher effect

Question

Quizplus · Accepted Answer

The on-the-run yield is typically lower than the off-the-run yield because on-the-run Treasuries are the most current issue and tend to have higher demand and liquidity, which drives their prices up and yields down compared to older, off-the-run securities.

The Difference Between the Yield on an On-The-Run Treasury Security