What characterizes a Treasury bond?

A Treasury bond is characterized primarily as a government bond that can be issued for long durations, typically up to 30 years. This long-term investment features a fixed interest rate, which is paid semi-annually to bondholders, making it an appealing option for those seeking steady income over many years. The extended maturity period differentiates Treasury bonds from other types of government securities such as Treasury bills and Treasury notes, which have shorter maturities.

Regarding the other choices, while Treasury bonds are indeed low-risk due to being backed by the full faith and credit of the U.S. government, they are not considered a short-term investment; rather, they are long-term. Additionally, while they can provide a reliable yield, the yield is typically lower than that of riskier investments. Lastly, Treasury bonds are issued by the federal government, not by state governments, making the selection of the correct statement vital in understanding the specific characteristics of these bonds.