CFA Level I · CFA Level I Exam · Fixed-Income Markets for Government Issuers
In a single-price (Dutch-style) sovereign bond auction, all successful bidders most likely:
In a single-price auction, all successful bidders pay the same price, which is the lowest accepted (stop-out) price. Paying each bidder's own bid is the feature of a multiple-price (discriminatory) auction, not a single-price one.
- Apay the same price, which is the lowest accepted priceCorrect
- Bpay the price each of them individually bid
- Cpay a price set by the central bank after the auction
Explanation
In a single-price auction, bids are accepted from the highest price downward until the issue is filled. Every successful bidder then pays the stop-out (lowest accepted) price. Paying one's own bid describes a multiple-price auction.
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