Locate the Treasury bond in Figure 8.4 maturing in February 2037. (Do not round

Question

Locate the Treasury bond in Figure 8.4 maturing in February 2037. (Do not round intermediate calculations.)

Maturity: 2037 February 15

Coupon: 4.75

Bid: 109:11

Asked: 109:13

Chg: -11

Asked Yield: 4.1519

What is its bid price? (Round your answer to 4 decimal places. (e.g., 32.1616))

What was the previous day’s asked price? (Round your answer to 1 decimal places. (e.g., 32.1))

Locate the Treasury bond in Figure 8.4 maturing in February 2037. (Do not round intermediate calculations.)

Maturity: 2037 February 15

Coupon: 4.75

Bid: 109:11

Asked: 109:13

Chg: -11

Asked Yield: 4.1519

Explanation / Answer

Coupon rate is 4.75%.

Bid rate = 109% + 11%/32

                = 109.34375%

Bid Price = bid rate x Face value

                = 109.34375 % x 1000

                   = 1093.4375

Asked Yield = 4.1519%

Previous day asked price = annual coupon / asked price

                                                = 1000x4.75% / 4.1519%

                                                =1144.1

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