Fixed_Income_Chapter_3 - Chapter 3 Overview of Bond Sector...

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Unformatted text preview: Chapter 3 Overview of Bond Sector and Instruments 1) A treasury security is quoted at 97-17 and has a par value of $100,000. Which of the following is its quoted dollar price a. $97,170.00 b. $97,531.25 c. $100,000.00 d. $975,312.50 2) An investment holds $100,000 (par value) worth of Treasury Inflation Protected Securities (TIPS) that carry a 2.5% semiannual pay coupon. If the annual inflation rate is 3%, what is the inflation-adjusted principal value of the bonds after 6 months? a. $100,000 b. $101,500 c. $102,500 d. $103,000 3) An investor holds $100,000 worth of TIPS currently trading at par. The coupon rate of 4% is paid semiannually, and the annual inflation is 2.5%. What coupon payment will the investor receive at the end of the first 6 months? a. $2,000 b. $2,025 c. $2,050 d. $4,000 4) A Treasury note (T-note) principal strip has 6 months remaining to maturity. How is its A Treasury note (T-note) principal strip has 6 months remaining to maturity....
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This note was uploaded on 11/06/2010 for the course ECON Econ taught by Professor Liasa during the Spring '10 term at University of San Francisco.

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Fixed_Income_Chapter_3 - Chapter 3 Overview of Bond Sector...

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