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Locate the Treasure bond in Figure 8.4 maturing in May 2038. Assume a par value of...

Locate the Treasure bond in Figure 8.4 maturing in May 2038. Assume a par value of 10000.

Is this premium or a discount bond

premium bond
discount bond

current yield
YTM
Bid-ask spread

5/15/2038. coupon= 4.5. bid= 130.2656. asked= 130.3281. cut= -0.2109. asked Ulf= 2.594

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Answer #1

1.
premium bond

2.
current yield=4.5/130.3281=3.4528%

3.
YTM=2.594%

4.
bid ask spread=(130.3281-130.2656)/100*10000=6.25

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