Question
Please show work when possible. In a new auction of 5-year notes, the Treasury announces they wish to sell $25B face value of new instruments.
Please show work when possible.
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 Treasurys 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% |
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What is the stop-out yield for this auction? At what coupon rate will the new notes be issued?
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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?
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What are the aggregate total issuance proceeds the Treasury will receive from this auction?
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What is the bid-to-cover ratio for this auction?
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