Question

Locate the Treasury bond in Figure 8.4 maturing in February 2043. Assume a par value of $20,000 6 Is this a premium or a discount bond? 10 Discount bond points Premium bond eBook What is its current yield? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is its yield to maturity? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places, e.g., 32.161.) What is the bid-ask spread in dollars? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) Print 2.93 % Current yield 2.766% YTM Bid-ask spread 6.24 Figure 8.4 Sample Wall Street Asked Bid Journal U.S. Maturity Coupon Asked Chg Yld 11/15/2018 -0.0313 1.342 Treasury Bond Prices 3.75 102.7266 102.7422 3/31/2019 100.3828 100.3984 -0.0078 1,36 1.625 -0.0078 3/15/2020 100.3516 1.625 100.3672 1.474 10/31/2021 1.25 1.74 98.0469 98.0625 -0.0313 2/15/2023 7.125 126.8516 126.8672 -0.0625 1.872 102.7969 5/15/2024 2.5 102.8125 -0.1094 2.045 8/15/2027 137.0781 -0.1016 2.189 6.375 137.0625 11/15/2028 5.25 129.1328 129.1953 -0.1484 2.272 2/15/2029 5.25 129.5469 129.6094 -0.1719 2.285 2/15/2036 4,5 129.7578 129.8203 -0.2344 2.473 5/15/2037 5 137.8594 137.9219 -0.2031 2.537 130.2656 -0.2109 2.594 5/15/2038 4.5 130.3281 -0.1719 2/15/2039 113.9297 2.644 3.5 113.8672 11/15/2039 -0.1875 2.665 4.375 128.4063 128.4688 5/15/2040 2.68 4.375 128.5781 128.6406 -0.2266 8/15/2040 3.875 119.9922 120.0547 -0.1953 2.696 106.8203 11/15/2041 3.125 106.8516 -0.1641 2.735 5/15/2042 104.4063 104.4375 -0.1797 2.751 3 8/15/2042 99.7188 99.75 -0.1875 2.764 2.75 11/15/2042 99.6484 -0.125 2.768 2.75 99.6797 2/15/2043 2.766 3.125 106.4844 106.5156 -0.1172 5/15/2043 2.875 101.7344 101.7656 -0.1328 2.778 5/15/2044 3.375 111.1953 111.2266 -0.2266 2.776 11/15/2044 103.9375 103.9688 -0.1875 2.79 94.1484 2/15/2045 -0.1719 2.808 2.5 94.1172 5/15/2045 103.875 -0.1875 2.798 3 103.8438 8/15/2045 2.804 2.875 101.3438 101.375 -0.1719 11/15/2045 103.8125 103.8438 -0.1797 2.802 5/15/2046 2.5 93.75 93.7813 -0.1797 2.818 11/15/2046 101.2188 101.25 -0.1719 2.812 2.875 103.8438 5/15/2047 3 -0.1719 2.808 103.8125 8/15/2047 -0.1484 2.811 2.75 98.7422 98.7734

Answer 1

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OND -Microsoft Excel (Product File Home Insert Page Layout Formulas Data Review View Add-Ins - Cut AutoSum A A General Wrap Text Calibri 11 Fill Copy A Merge & Center Conditional Format Paste BIU Cell Insert Delete Format Sort & Find & 2 Clear Format Painter er Select Formatting ble Styles Clipboard Font Alignment Number Shules Cells Editing AV424 AP AQ AR AS AT AU AV AW AX AY 409 410 FACE VALUE 20000 411 Feb-43 MATURITY 412 413 COUPON 3.125% BID PRICE 414 106.4844 ASK PRICE 415 106.5156 416 YTM 2.766% 417 PREMIUM BOND AS YTM IS LOWER THAN COUPON RATE 418 ANS 1 419 2.93% [3.125/106.5 156] COUPON INTEREST/ASKED PRICE = 420 ANS 2 CURRENT YIELD 421 ANS 3 YTM 2,766% 422 423 6.24 424 ANS 4 BID-ASK SPREAD (106.5156%-106.4844%) X 20000 425 426 427 YIELD SPOT WARRAN Trefund bond Sheet2 BANKING NOTE CLEAN INVOICE PRICE Sheet 130% . BIDDING, UNDERWRITING AFN EUAC AW PM LIFE LP, IP, MRP, INFLATION YIELD Re erences 08:05 ENG 15-06-2019