Calculate treasury note price with asked price method

Reference no: EM13827767

Problem:

U.S. Treasury quotes from the WSJ on Oct. 15, 1993:

Rate	Maturity	Ask	Change	Ask yield
7.1250	Oct 15, 1995	102.08	-1	5.9156

1. What is the duration of the above Treasury note? Use the asked price to calculate the duration. Recall that Treasuries pay interest semiannually.

a. 3.86 years.
b. 1.70 years.
c. 2.10 years.
d. 1.90 years.
e. 3.40 years.

2. If yields increase by 10 basis points, what is the approximate price change on the $100,000 Treasury note? Use the duration approximation relationship.

a. +$188.69.
b. +$16.05.
c. -$1,605.05.
d. -$16.05.
e. +$160.51.

Additional information:

These short questions is from Finance and the questions are regarding US Treasury notes. The price of the Treasury note is to be computed using asked price. And the change in price of treasury notes with raise in 10 basis points also requires to be computed.

Reference no: EM13827767

Questions Cloud

Write a report about a start-up covering its business plan : Write A Report About A Start-Up Covering Its Business Plan

Review ways in which equality of opportunity can be promoted : The question in Sociology and it is explain the ways in which equality of opportunity, inclusion and non-judgmental practice can be promoted and supported in work with parents.

Determining the level of calcium in a food supplement : A consumer product agency wants to evaluate the accuracy of determining the level of calcium in a food supplement. There are a large number of possible testing laboratories but only three assay methods of interest

Report on case study apple ipad in india was there a way out : Report On Case Study Apple Ipad In India Was There A Way Out

Calculate treasury note price with asked price method : What is the duration of the above Treasury note? Use the asked price to calculate the duration. Recall that Treasuries pay interest semiannually.

Study of determinants of regional unemployment rates : This problem related to Basic Statistics and it discuss about incorporating various effects into the study of determinants of regional unemployment rates in Canada. This has been discussed in the solution in detail

Role of innovation management and technology : Role Of Innovation Management And Technology

Ocean strategy challenges conventional models of strategy : Blue Ocean Strategy Challenges Conventional Models Of Strategy

Discusses about two variables in a correlation study : These two questions related to Basic Statistics. The first question discusses about two variables in a correlation study. The second question discusses about what we seek to determine using correlation study

User Account

All Pages