Government bonds and various other ``fixed-income'' securities are especially suitable for study using quantitative models. It is relatively straightforward to quantify the cash flows they provide, and the interest rate uncertainty provides plenty of complexity to model.

Several interesting changes have influenced Treasury markets recently. One is the introduction of TIPs -- inflation-adjusted Treasuries whose cash flows are adjusted by lagged inflation. Another change is the repurchase by the government of large quantities of Treasury Bonds. According to some traders, this has created a shortage of Treasury bonds, and Treasury bonds are now unreasonably expensive at the long end.