Locate the Treasury bond in Figure 8.4 maturing in August 2042. Assume a par value of $10,000. Is this a premium or a discount bond? O Premium bond O Discount bond 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.) Current yield YTM Bid-ask spread % %
Locate the Treasury bond in Figure 8.4 maturing in August 2042. Assume a par value of $10,000. Is this a premium or a discount bond? O Premium bond O Discount bond 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.) Current yield YTM Bid-ask spread % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Locate the Treasury bond in Figure 8.4 maturing in August 2042. Assume a par value of
$10,000.
Is this a premium or a discount bond?
O Premium bond
O Discount bond
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.)
Current yield
YTM
Bid-ask spread
%
%
Transcribed Image Text:Figure 8.4
Sample Wall Street
Journal U.S.
Treasury Bond
Prices
AAAANN
Maturity
11/15/2018
3/31/2019
3/15/2020
10/31/2021
2/15/2023
5/15/2024
8/15/2027
11/15/2028
2/15/2029
2/15/2036
5/15/2037
5/15/2038
2/15/2039
11/15/2039
5/15/2040
8/15/2040
11/15/2041
5/15/2042
8/15/2042
11/15/2042
2/15/2043
5/15/2043
5/15/2044
11/15/2044
2/15/2045
5/15/2045
8/15/2045
11/15/2045
5/15/2046
11/15/2046
5/15/2047
8/15/2047
OLO
f7
Coupon
1
Bld
102.7266
3.75
1.625 100.3828
1.625
100.3516
98.0469
1.25
7.125
126.8516
102.7969
137.0625
129.1328
5.25
5.25 129.5469
4.5
129.7578
137.8594
130.2656
113.8672
4.375 128.4063
4.375 128.5781
3.875 119.9922
3.125
106.8203
104.4063
fa
2.5
6.375
5
4.5
9
3.5
3
2.75
2.75
3.125
2.875
3.375
SOURCE: www.wsj.com. September 20, 2017.
3
2.5
3
2.875
3
2.5
2.875
3
2.75
99.7188
99.6484
106.4844
101.7344
111.1953
103.9375
94.1172
103.8438
101.3438
103.8125
93.75
101.2188
103.8125
98.7422
a
✡
hp
Asked
f10
102.7422
100.3984 -0.0078
-0.0078
100.3672
98.0625
-0.0313
126.8672 -0.0625
102.8125
-0.1094
137.0781
-0.1016
129.1953
-0.1484
129.6094 -0.1719
129.8203
-0.2344
137.9219 -0.2031
130.3281
-0.2109
113.9297
-0.1719
-0.1875
128.4688
128.6406
120.0547
106.8516
104.4375
99.75
99.6797
106.5156
101.7656
111.2266
103.9688
94.1484
103.875
101.375
Chg
-0.0313
103.8438
93.7813
101.25
103.8438
98.7734
$ M
99+
-0.2266
-0.1953
-0.1641
-0.1797
-0.1875
-0.125
-0.1172
-0.1328
-0.2266
-0.1875
-0.1719
-0.1875
-0.1719
-0.1797
-0.1797
-0.1719
-0.1719
-0.1484
Asked
Yld
1.342
1.36
1.474
1.74
1.872
2.045
2.189
2.272
2.285
2.473
2.537
2.594
2.644
2.665
2.68
2.696
2.735
2.751
2.764
2.768
2.766
2.778
2.776
2.79
2.808
2.798
2.804
2.802
2.818
2.812
2.808
2.811
+
-
ins
prt sc
delete
backspace
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