Locate the Treasury issue in Figure 7.4 maturing in February 2024. Assume a par

Question

Locate the Treasury issue in Figure 7.4 maturing in February 2024. Assume a par value of $10,000.

What is the quoted price (in dollars) that you would receive for selling this bond? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

What was the previous day’s quoted price (in dollars) to purchase the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

What was the previous day’s quoted price (in dollars) to purchase the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

Face value of bond = $10,000

Bid price of bond = 99.0703

Ask Price of bond = 99.6719

Quoted price that will receive by selling the bond is the ask price of bond. So total amount receive after sell of bond is calculated below:

Sale price = $10,000 × 99.6719 / 100

                  = $9,967.19

Quoted price that will receive by selling the bond is $9,967.19.

Similarly previous day quoted price for purchase of bond is the bid price of bond. So purchase price of bond is calculated below:

Purchase price = $10,000 × 99.0703 / 100

                           = $9,907.03

Previous day quoted price for purchase of bond is $9,907.03.

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.