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Sample Treasury Bond Quote (Example FYI Only) $1,000 par Treasury Bond Maturity Ced Adela Asked Y 11/15/20453.000 107856397650003834 Maturity molyr: Month and year, the bond matures November 15, 2045, but it may be callable before that time. Coupon: Coupon rate of 3% or $30.00 per year but paid semiannually ($1,000 face). Bid: The closing price per $100 of par the dealer will pay to buy the bond the seller would receive this price from selling to the dealer. In this case, 107.6563% of $1,000 or $1,076,56, Asked: The closing price per $100 of par the dealer requires to sell the bond; the buyer would pay this price to the dealer. In this case, 107.6865% of S1,000 or 1,076.87. Chg: The change from the prior closing Asked price. In this case, the Asked price increased 0.0938 from the prior quoted closing ask price Asked Yld - Promised compound yield rate if purchased at the Asked price. In this case, the yield is 2.62% Note that the yield is the yield to call if the price is above par and the yield to maturity if below par. The yield calculation uses semiannual compounding. Acerued Interest Example: You buy a 6% coupon $1,000 par T-bond 59 days after the last coupon payment. Settlement occurs in two days. You become the owner 61 days after the last coupon payment (59-2). and there are 121 days remaining until the next coupon payment. The bond's clean price quote is 120.59375. What is the full or dirty price (sometimes called the invoice price)? The clean price is Thus, the dirty price is The quoted ask yield on a 14-year $1.000 par T-bond with a 7 percent semiannual payment coupon and a price quote of 98-15 is On September 1, 2012, an investor purchases a $10,000 par T- bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price of the bond is. An investor is in the 28 percent federal tax bracket and pays a 9 percent state tax rate and 4 percent in local income taxes. For this investor a municipal bond paying 6 percent interest is equivalent to a corporate bond paying interest The quoted ask yield on a 14-year $1.000 par T-bond with a 7 percent semiannual payment coupon and a price quote of 98-15 is On September 1, 2012, an investor purchases a $10,000 par T- bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price of the bond is An investor is in the 28 percent federal tax bracket and pays a 9 percent state tax rate and 4 percent in local income taxes. For this investor a municipal bond paying 6 percent interest is equivalent to a corporate bond paying interest. You purchase a $1,000 face value convertible bond for $975, The bond can be converted into 150 shares of stock. The stock is currently priced at $5.25. At what minimum stock price would you be willing to convert? You purchased a five-year annual payment 6 percent coupon bond for $1.000 and you planned on holding it to maturity. However, right after you bought the bond, it was called at $1.043.29 when all interest rates fell to 5 percent and remained there for the full five years. You reinvested the money for the full five years. What was your annual compound rate of return off your original investment? Municipal Bond Rates & Taxes: For a 28% tax bracket, what is the equivalent after tax rate of a 6% corporate yield? You find the following quote for a corporate bond (51,000 par, paying interest semiannually) cong 2013 absen th a. What was the range of the price for the given day? b. How many dollars would you receive from each coupon payment? cApproximately what risk level is implied by the bond rating? d. What would have been the Last Price on the day before? You purchase a $1,000 face value convertible bond for $975. The bond can be converted into 150 shares of stock. The stock is currently priced at $5.25. At what minimum stock price would you be willing to convert? You purchased a five-year annual payment 6 percent coupon bond for $1.000 and you planned on holding it to maturity. However, right after you bought the bond, it was called at $1,043.29 when all interest rates fell to 3 percent and remained there for the full five years. You reinvested the money for the full five years. What was your annual compound rate of return off your original investment? Municipal Bond Rates & Taxes: For a 28% tax bracket, what is the equivalent after tax rate of a 6% corporate yield? You find the following quote for a corporate bond ($1,000 par, paying interest semiannually! Medy NameShop Low to hang Yi be crazoden 2013 and we 9306 som a. What was the range of the price for the given day? b. How many dollars would you receive from each coupon payment? C. Approximately what risk level is implied by the bond rating? d. What would have been the Last Price on the day before? A bondholder purchased a 9 percent coupon, S1,000 par three- year bond at a 9 percent yield. Interest rates then immediately fell to 7 percent and his bond was called at a price of $1,040. He reinvested his money and eamed 7 percent on the $1,040 for three years. Did the call help or hurt the bondholder? What was his three-year rate of return on his original investment? Sample Treasury Bond Quote (Example FYI Only) $1,000 par Treasury Bond Maturity Ced Adela Asked Y 11/15/20453.000 107856397650003834 Maturity molyr: Month and year, the bond matures November 15, 2045, but it may be callable before that time. Coupon: Coupon rate of 3% or $30.00 per year but paid semiannually ($1,000 face). Bid: The closing price per $100 of par the dealer will pay to buy the bond the seller would receive this price from selling to the dealer. In this case, 107.6563% of $1,000 or $1,076,56, Asked: The closing price per $100 of par the dealer requires to sell the bond; the buyer would pay this price to the dealer. In this case, 107.6865% of S1,000 or 1,076.87. Chg: The change from the prior closing Asked price. In this case, the Asked price increased 0.0938 from the prior quoted closing ask price Asked Yld - Promised compound yield rate if purchased at the Asked price. In this case, the yield is 2.62% Note that the yield is the yield to call if the price is above par and the yield to maturity if below par. The yield calculation uses semiannual compounding. Acerued Interest Example: You buy a 6% coupon $1,000 par T-bond 59 days after the last coupon payment. Settlement occurs in two days. You become the owner 61 days after the last coupon payment (59-2). and there are 121 days remaining until the next coupon payment. The bond's clean price quote is 120.59375. What is the full or dirty price (sometimes called the invoice price)? The clean price is Thus, the dirty price is The quoted ask yield on a 14-year $1.000 par T-bond with a 7 percent semiannual payment coupon and a price quote of 98-15 is On September 1, 2012, an investor purchases a $10,000 par T- bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price of the bond is. An investor is in the 28 percent federal tax bracket and pays a 9 percent state tax rate and 4 percent in local income taxes. For this investor a municipal bond paying 6 percent interest is equivalent to a corporate bond paying interest The quoted ask yield on a 14-year $1.000 par T-bond with a 7 percent semiannual payment coupon and a price quote of 98-15 is On September 1, 2012, an investor purchases a $10,000 par T- bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price of the bond is An investor is in the 28 percent federal tax bracket and pays a 9 percent state tax rate and 4 percent in local income taxes. For this investor a municipal bond paying 6 percent interest is equivalent to a corporate bond paying interest. You purchase a $1,000 face value convertible bond for $975, The bond can be converted into 150 shares of stock. The stock is currently priced at $5.25. At what minimum stock price would you be willing to convert? You purchased a five-year annual payment 6 percent coupon bond for $1.000 and you planned on holding it to maturity. However, right after you bought the bond, it was called at $1.043.29 when all interest rates fell to 5 percent and remained there for the full five years. You reinvested the money for the full five years. What was your annual compound rate of return off your original investment? Municipal Bond Rates & Taxes: For a 28% tax bracket, what is the equivalent after tax rate of a 6% corporate yield? You find the following quote for a corporate bond (51,000 par, paying interest semiannually) cong 2013 absen th a. What was the range of the price for the given day? b. How many dollars would you receive from each coupon payment? cApproximately what risk level is implied by the bond rating? d. What would have been the Last Price on the day before? You purchase a $1,000 face value convertible bond for $975. The bond can be converted into 150 shares of stock. The stock is currently priced at $5.25. At what minimum stock price would you be willing to convert? You purchased a five-year annual payment 6 percent coupon bond for $1.000 and you planned on holding it to maturity. However, right after you bought the bond, it was called at $1,043.29 when all interest rates fell to 3 percent and remained there for the full five years. You reinvested the money for the full five years. What was your annual compound rate of return off your original investment? Municipal Bond Rates & Taxes: For a 28% tax bracket, what is the equivalent after tax rate of a 6% corporate yield? You find the following quote for a corporate bond ($1,000 par, paying interest semiannually! Medy NameShop Low to hang Yi be crazoden 2013 and we 9306 som a. What was the range of the price for the given day? b. How many dollars would you receive from each coupon payment? C. Approximately what risk level is implied by the bond rating? d. What would have been the Last Price on the day before? A bondholder purchased a 9 percent coupon, S1,000 par three- year bond at a 9 percent yield. Interest rates then immediately fell to 7 percent and his bond was called at a price of $1,040. He reinvested his money and eamed 7 percent on the $1,040 for three years. Did the call help or hurt the bondholder? What was his three-year rate of return on his original investment

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