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A Treasury issue is quoted at 103.51525 bid and 103.575 ask. Assume a face value of...

A Treasury issue is quoted at 103.51525 bid and 103.575 ask. Assume a face value of $1,000. What is the least you could pay to acquire a bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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Answer #1

Bid price is the maximum price a investor is offering whereas asked price is the minimum price a seller is asking.

Asked Price = Asked Quote * Face Value
Asked Price = 103.575% * $1,000
Asked Price = $1,035.75

So, you can pay a minimum sum of $1,035.75 to acquire this bond.

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