What is the clear and dirty price

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Question 1 - Treasury Bond Quote by using 32nd to determine the bid and asked price. (The T-Bond & Notes are quated in this way (percent & 32nds of 1%) in the seconday market)

The bond maturity 2025, July 30,

Bid price: 130.35

Asked Price: 130.30

What is the bid and asked quoting price and provide the interpretation.

Question 2: Calculate the YTM on STRIPS - Suppose the principle STRIPS maturity in July 2025. The asked price at the closed on July 2026 (or present value) is 98.276%

When STRIPS matures on July 15, 2026 (in 0.96521 year, (95.521%). the STRIPS holder will receive 100% of the face value (or future value).

Using semiannual compounding, calculate the yield to maturity (YTM) and provide the brief interpretation.

Question 3: Accrued Interest (calculate the clear and dirty price) - Investor buy a 5% coupon with $1000 face value T-bond 45 days after the last coupon payment. Settlement occurs in five days. It has 135 days remaining until the next coupon payment. The bond's clean price quote is 130:25. What is the clear and dirty price?

Reference no: EM133028275

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