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Table/Figure 7.4:

17. Using Treasury Quotes [LO2] Locate the Treasury bond in Figure 7.4Q maturing in February 2040. Is this a premium or a discount bond? What is its current yield? What is its yield to maturity? What is the bid-ask spread in dollars? Assume a par value of $10,000. Asked Yield Maturity Coupon Bid Asked Chg 11/15/2018 1.250 100.1484 100.1641 0.0391 1.160 4/15/2019 0.875 99.0703 99.0859 0.0625 1.286 4/30/2020 1.125 98.5938 98.6094 0.1016 1.558 8/15/2021 8.125 127.4844 127.5000 0.2344 1.857 7/31/2022 2.000 99.9609 99.9766 0.2266 2.004 2/28/2023 1.500 96.5703 96.5859 0.2500 2.096 5/15/2024 2.500 101.9375 101.9531 0.3125 2.210 8/15/2025 6.875 135.8438 135.8594 0.3438 2.262 8/15/2026 1.500 92.4766 92.4922 0.2969 2.380 8/15/2027 6.375 136.8281 136.8438 0.4688 2.414 8/15/2028 5.500 130.2891 130.3516 0.4531 2.473 11/15/2028 5.250 128.1563 128.7578 128.2188 128.8203 0.4453 0.4609 2.485 2.478 2/15/2029 5.250 8/15/2029 6.125 139.1875 139.2500 0.5391 2.478 5/15/2030 6.250 142.5781 134.3438 142.6406 134.4063 0.5938 0.5625 2.478 2.470 2/15/2031 5.375 2/15/2036 4.500 128.0781 128.1406 0.7031 2.618 2/15/2037 4.750 131.7891 131.8516 0.7500 2.688 5/15/2037 5.000 135.9531_ 136.0156 0.7656 2.690 5/15/2038 14.500 128.0625 128.1250 0.6875 2.749 2/15/2039 13.500 110.9844 111.0469 10.6406 2.824 8/15/2039 4.500 127.4922 | 127.5547 0.7344 12.839 2/15/2040 14.625 129.7188 129.7813 0.6953 2.855 11/15/2040 4.250 123.3438 123.4063 0.7422 2.885 2/15/2041 4.750 132.4688 132.5000 0.7578 2.872 12/15/2042 3.125 103.3516 1033828 0.6484 2.934 2/15/2043 3.125 103.1406 103.1719 10.6250 12.950 5/15/2043 2.875 98.3594 198.3906 0.5625 2.963 2/15/2044 3.625 112.7266 | 112.7578 0.6484 2.939 2/15/2045 90.7578 90.7891 | 2.987 12.500 2.875 0.6016 0.6719 | 11/15/2046 9 8.117298.1484 2.969

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