In a new auction of 5-year notes, the Treasury announces they wish to sell $25B face value of new instruments. The general public submits non-competitive bids for these new notes in the aggregate amount of $8B. The primary government securities dealers submit bids in an aggregate amount of $38B with the following competitive bid yields submitted to the Treasury's dealer desk: Bidding dealer Amount bid Bid yield (%) A $4B 4.38% B $5B 4.42% C $6B 4.45% D $7B 4.49% E $10B 4.52% F $6B 4.54% 4. What is the stop-out yield for this auction? At what coupon rate will the new notes be issued? 5. If you submitted a non-competitive order to buy ten of these notes for your own account, how much in funds will be debited from your account? 6. What are the aggregate total issuance proceeds the Treasury will receive from this auction? 7. What is the bid-to-cover ratio for this auction?
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You sold the bond below on 2/10/22 at 92.000. Calculate your dirty sale price. Holding period yield (HPY) Last coupon date pre-purchase: 7/15/2016 First coupon date post-purchase: 1/15/2017 Purchase price (clean): 90.000 Purchase (settlement) date: 10/1/2016 Sale price (clean): 92.000 Sale date: 2/10/2022 Coupon rate: 5.00% Coupon: Semi-annual Convention: 30/360 91.653 92.347 92.359 93.041 94.015 For the bond below, during your holding period, you achieved a reinvestment rate of 8% on a bond equivalent yield basis. Calculate the value — at the sale date — of all reinvested coupons. Holding period yield (HPY) Last coupon date pre-purchase: 7/15/2016 First coupon date post-purchase: 1/15/2017 Purchase price (clean): 90.000 Purchase (settlement) date: 10/1/2016 Sale price (clean): 92.000 Sale date: 2/10/2022 Coupon rate: 5.00% Coupon: Semi-annual Convention: 30/360 27.500 29.700 35.065 33.900 33.716
Akash M.
You find the following Treasury bond quotes. To calculate the number of years until maturity, assume that it is currently May 2022. All of the bonds have a par value of $1,000 and pay semiannual coupons. Maturity Month/Year Bid Asked Change Ask Yield May 35 103.5449 103.5327 +.3287 5.979 May 40 104.4939 104.6396 +.4281 ?? May 50 ?? ?? +.5392 4.011 Rate ?? 6.202 6.158 a. In the above table, find the Treasury bond that matures in May 2050. What is the asked price of this bond in dollars? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. If the bid-ask spread for this bond is .0651, what is the bid price in dollars? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a. Asked price $ 1,365.68 b. Bid price $ 1,365.03
An analyst observes a 5-year, 10% semiannual-pay bond. The face value is $1,000. The analyst believes that the yield to maturity on a semiannual bond basis should be 15%. Based on this yield estimate, the price of this bond would be: A. $828.40 B. $1,189.53 C. $1,193.04 D. $1,180.02 E. None of the above. 2. A bond that matures in 6 years sells for $950. The bond has a face value of $1,000 and a 5.5% annual coupon. What is the bond’s current yield? A. 5.50% B. 6.00% C. 5.79% D. 6.25% E. None of the above. 3. A bond that matures in 6 years sells for $950. The bond has a face value of $1,000 and a 5.5% annual coupon. What is the bond’s yield to maturity, YTM? A. 5.50% B. 5.79% C. 6.00% D. 6.49% E. None of the above. 4. Sadik Inc.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $100 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to call (YTC)? A. 6.63% B. 6.98% C. 7.35% D. 7.37% E. None of the above.
Madhur L.
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