Treasury notes and bonds. Use the information in the following table: What is the price in dollars of the February 2000 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 2000 Treasury note? (Round to the nearest cent.) Data Table
Treasury notes and bonds. Use the information in the following table: What is the price in dollars of the February 2000 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 2000 Treasury note? (Round to the nearest cent.) Data Table
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
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Transcribed Image Text:**Treasury Notes and Bonds: Educational Overview**
**Problem Prompt:**
Use the information provided in the table below:
- What is the price in dollars of the February 2000 Treasury note with a 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 2000 Treasury note?
*(Round to the nearest cent.)*
**Data Table:**
| Type | Issue Date | Price | Coupon Rate | Maturity Date | YTM | Current Yield | Rating |
|------|------------|-------|-------------|---------------|-----|---------------|--------|
| Note | Feb 2000 | — | 7.50% | 2-15-2010 | 4.004% | — | AAA |
**Explanation of Terms:**
- **Type:** Specification of the financial instrument, in this case, a Treasury note.
- **Issue Date:** The date when the note was originally issued.
- **Price:** Current market price of the Treasury note (not provided in the table).
- **Coupon Rate:** Annual interest rate paid by the Treasury note.
- **Maturity Date:** The date when the principal amount of the note will be returned.
- **YTM (Yield to Maturity):** Estimated annual return if the note is held until it matures.
- **Current Yield:** The annual return received from the note in relation to its price (not provided).
- **Rating:** The credit quality of the note assigned by a rating agency.
In this scenario, you need to compute the price and current yield of the February 2000 Treasury note based on the information provided and financial formulas related to bond pricing.
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