YOU MAY WANT TO REVIEW SECTION 7.5 TO ANSWER THIS QUESTION. Remember that the fa

Question

YOU MAY WANT TO REVIEW SECTION 7.5 TO ANSWER THIS QUESTION. Remember that the face value on these will be $1,000 even though the prices are quoted as a percent of par.

Locate the Treasury bond maturing in May 2030 in the figure below:

This is a (Click to select)premiumdiscount bond. Its current yield is  percent (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16)) and yield to maturity is  percent. The dollar value of the bid-ask spread is $. (Do not include the dollar sign ($). Round your answer to 4 decimal places. (e.g., 32.1616))

Maturity Coupon    Bid Asked Asked Yield November 2024    7.500 135.05    135.06    4.47 November 2027 6.125 120.07 120.08 4.55 August 2029 6.125 121.01 121.02 4.56 May 2030 6.250 123.16 123.11 4.55 August 2028 5.500 112.05 112.06 4.57 February 2026 6.000 117.15 117.16 4.55

Explanation / Answer

Solution-

This bond is premium bond because bond sells for more than hundred percent (100%) of the face value.

Solution-

The bases of current yield is the asked price

So,current yield is:

Current yield = Annual coupon payment / Price Current yield

Current yield = $52.50 / $1,231.1

Current yield = .0427, or 4.27%

Solution-

The Yield to maturity (YTM) is exist or located under the

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