nsider a put option on a stock that currently sells for £100, but may rise to £120 or to £80 after 1 year. The risk free rate of return is 10%, and the exercise price is £90

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.