(a) Explain the difference between TIP and STRIPS. Under what economic situation would it be advantageous to purchase TIPS? Please provide an example of how TIPS bonds work.
(b) Why would a company issue convertible bonds? Why would an investor purchase convertible bonds? Why would an investor purchase bonds with a detachable warrant?
(c) What is the difference between competitive bidding and noncompetitive binding for treasury securities? Please provide an example of how the treasury auction process works.