Leaders must know the differences between systematic and unsystematic risk. Systematic risk is general and inevitable. Because we are in a leadership class and not an investment class, we will not concentrate on systematic and unsystematic risk relating to managing an investment portfolio, which is relevant. So$,$ why might a leader be familiar with systematic and unsystematic risk? We will explore the question in week five.$$

Class, refer to Section $11\mathrm{.}2.$ In Section $11\mathrm{.}2,$ Brealey, Myers, and Marcus $(2023)$ shared information about the historical record of treasuries. The information about the treasuries continues the discussion in Chapter $6,$ from week one. Why are we discussing treasuries in a leadership class? We will answer that question in week five. Before answering the question, with the class member's permission, I would like to share some foundational information about bonds because treasuries are a type of bond.$$Some of the information is a recap from week one, Chapter $6.$

Generally, leaders of governments and companies issue bonds to finance capital projects $($Brealey et al$.,2023).$ When a government entity issues a bond, it is called a government bond $($Brealey$,$ Myers, & Marcus, $2023).$ When a business issues a bond, it is a corporate bond.$$

The federal, state, and local governments issue bonds. When the federal government issues a bond, it is called a treasury $($Brealey et al$.,2023).$ When the state and local governments issue a bond, it is a municipal bond $($Brealey et al$.,2023).$ I never participated in issuing federal bonds, but I helped issue state and local bonds. For instance, I worked with states and localities that issued bonds to fund airport renovations, bridge repair, highway repair, etc.$$I helped issue bonds for school districts, hospitals, etc.$$

Okay, what about the treasury? For more information, refer to any section of Chapter $6$ and Section $11\mathrm{.}2$ of Chapter $11.$ How does the information in Section $11\mathrm{.}2$ about treasuries relate to Chapter $6?$

James

Reference

Brealey, R$.,$ Myers, S$.,$ & Marcus, A$.(2023).$Fundamentals of corporate finance$(11$th ed$.).$ McGraw$-$Hill Education.