Turn back to Figure 2.4 and look at the fi rst Treasury bond maturing in November 2014.

a. How much would you have to pay to purchase one of these bonds?

b. What is its coupon rate?

c. What is the current yield of the bond?

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U.S. Government Bonds and Notes Representative Over-the-Counter quotation based on transactions of $1 million or more. Treasury bond, note and bill quotes are from midafternoon. Colons in bond and note bid-and-asked quotes represent 32nds; 101:01 means 101%. Net change in 32nds. n-Treasury Note. Hinflation-indexed issue. Treasury bill quotes in hundredths, quoted in terms of a rate of discount. Days to maturity calculated from settlement date. All yields are to maturity and based on the asked quote. For bonds callable prior to maturity, yields are computed to the earliest call date for issues quoted above par and to the maturity date for issues quoted below par. *-When issued. Daily change expressed in basis points. ASK BID ASKED CHG YLD MATURITY RATE MO/YR 3.375 3.125 2.250 Jan 07i Jan 07n Feb 07 6.250 Feb 07m 3.375 Feb 07m 3.750 Mar 07 3.875 Feb 13 3.625 May 13 1.875 Jul 13i 4.250 Aug 13 12.000 Aug 13 99:28 99:29 99:28 99:22 99:27 99:21 100:04 99:23 99:21 100:05 99:24 99:22 M 96:06 96:07 +8 94:24 +8 94:23 97:00 97:01 +1 98:00 98:01 +9 111:04 111:05 +2 88799 6.72 4.62 4.89 4.73 4.90 4.99 4.59 4.58 2.37 4.60 4.71 RATE 4.250 2.000 4.000 MATURITY MO/YR Nov 13m Jan 14i Feb 14 4.750 May 14m 13.250 May 14 2.000 Jul 14i 4.250 12.500 11.750 4.250 1.625 Aug 14 Aug 14 Nov 14 Nov 14 Jan 15i ASK YLD BID ASKED CHG 97:29 97:30 +10 4.60 97:16 97:17 +1 2.38 96:09 96:10 +10 4.61 100:26 100:27 +9 4.61 119:02 119:03 +4 4.61 97:14 97:15 2.37 97:21 97:22 +10 4.61 119:04 119:05 +4 4.62 +6 4.59 +9 4.61 +1 2.37 118:30 118:31 97:19 97:20 94:18 94:19 *** FIGURE 2.4 Listing of Treasury issues Source: From The Wall Street Journal, January 5, 2007. Reprinted by permission of Dow Jones & Company, Inc. via Copyright Clearance Center, Inc. © 2007 Dow Jones & Company, Inc. All Rights Reserved Worldwide.