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
Related questions
Question
Transcribed Image Text:Treasury notes and bonds. Use the information in the following table: . What is the price in dollars of the February 2002 Treasury note with semiannual payment if its par value is
$100,000? What is the current yield of this note?
What is the price in dollars of the February 2002 Treasury note?
(Round to the nearest cent.)
Transcribed Image Text:Today is February 15, 2008
Issue
Coupon
Maturity
Current
Туре
Price
YTM
Rating
Date
Rate
Date
Yield
Note
Feb 2002
6.75%
2-15-2012
5.728%
AAA
Expert Solution
Step 1
Treasury bond is referred to as a long-term government debt security, which is issued by the US treasury department along with a fixed rate of return. Treasury bondholders used to receive semi-annual interest payments from an inception till the time of maturity at the point of the bond's face value that is repaid.
Treasury bonds can be purchased from the US treasury directly or with the help of brokers, banks, or mutual fund corporations. They are usually regarded as risk-free as these are backed by the credit as well as the full faith of the US government.
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