Price of the bond given the market clearing yield

Assignment Help Financial Management
Reference no: EM131999409

The Treasury is issuing a 2-year new note on March 15, 2013. The total offering is $15,000,000,000, and we observe the following demand schedule:

Tendered Yield

1,000,000,000 0.999%

3,000,000,000 1.000%

1,000,000,000 1.001%

4,000,000,000 1.002%

2,000,000,000 1.003%

3,000,000,000 1.004%

5,000,000,000 1.005%

1,000,000,000 1.006%

What yield clears the market? If the Treasury wishes to offer the issue at as close to par as possible, but not at a premium (i.e. price must be below par value), what is the coupon on the bond? The Treasury offers coupons in increments of 1/8%. What is the price of the bond given the discount factors above? What is the price of the bond given the market clearing yield (YTM)?

Reference no: EM131999409

Questions Cloud

Required rates of returns for the three securities : What are the corresponding required rates of returns for the three securities?
Why is that rate calculated above an appropriate rate : what is the required rate of return on Intel stock? Why is that rate calculated above an appropriate rate?
What is its approximate yield to maturity : A 10-year bond pays 12 interest on a $1000 face value annually. If it currently sells for $1,190, what is its approximate yield to maturity?
Distinguish between the value of security and its price : Distinguish between the value of a security and its price. Under what conditions would value equal price?
Price of the bond given the market clearing yield : What is the price of the bond given the discount factors above? What is the price of the bond given the market clearing yield (YTM)?
Explain how ETFs are exposed to exchange rate risk : Describe international ETFs, and explain how ETFs are exposed to exchange rate risk.
What will be the required return on your new portfolio : You have been managing a $5 million portfolio that has beta of 1.25 and required rate of return of 12%. What will be the required return on your new portfolio?
Free cash flow did firm generate during just-completed year : How much free cash flow did the firm generate during the just-completed year?
Return on invested capital is profitability ratio : Return on Invested Capital (ROIC) is a profitability ratio that measures how effective the firm is at generating return for investors who have provided capital.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd