Question

Locate the Treasury issue in Figure 7.4 maturing in February 2044. Assume a par value of $10,000. a. What is its coupon rate? (Enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) b. What is its bid price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What was the previous day's asked price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Coupon rate b. Bid price c. Previous day's price | $ $ 3.000 % 102.52 115.02

Answer 1

The coupon rate as on February 2044 as per the table, is 3.625% Calculate the bid price as follows: Bid price = Bid quote > Face value = 129.7188%x $10,000 = $12,971.88 Therefore, the bid price in dollars is $12,971.88 Calculate the previous day's asked price as follows: Previous day's asked price = (Ask quote - Change) Par value =(112.7578%-0.6484%)x$10,000, =112.1094%x10,000 =11,210.94 Therefore, the previous day's ask price is $11,210.94