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Good Evening,


I am re-submitting this question, as the wrong answer was provided previously.

Its been in the "review" status for over 5 hours now... So I'm hoping that this works.


Please advise as to the asked price and bid price below.


The following was provided to me previously and was incorrect.


a). Asked Bond Price = PV of Coupon Payment + PV of Maturity Value

= [Periodic Coupon Payment * {(1 - (1 + r)^-n) / r}] + [Face Value / (1 + r)^n]

= [{6.143%*$1,000} * {(1 - (1 + 0.03951)^-(2037-2016)) / 0.03951}] + [$1,000 / {1 + 0.03951}^(2037-2016)]

= [$61.43 * {0.5568 / 0.03951}] + [$1,000 / 2.2563]

= [$61.43 * 14.0927] + $443.20

= $865.71 + $443.20 = $1,308.91


b).Bid-Ask Spread = Ask Price - Bid Price

(0.0641/100)*$1,000 = $1,308.91 - Bid Price

Bid Price = $1,308.91 - $0.641= $1,308.27


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You find the following Treasury bond quotes. To calculate the number of years until maturity. assume that it is currently May 2016. The bonds have a par value of $1,000. Maturity Ask
Rats MoIY r Bid Asked Chg Yld
7'? May 22 103.5410 103.5288 «9.3248 5.919
6.052 May 27 104.4900 104.6357 +.4245 ??
6.143 May 37 7? ?? +5353 3.951 In the above table, find the Treasury bond that matures in May 2037. What is the asked price of this bond in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.) Asked price $ If the bid-ask spread for this bond is .0641, what is the bid price in dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Bid price $ eBook 8. Resources eBcok: 6.5 Bond Markets

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