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Quote for Treasury bond (as of January 2023 Maturity: 1/15/2033 Coupon rate (%): 3.000 Bid price: 95.3000 Asked price: 95.5000 Asked yield (%): 3.538 Story
Quote for Treasury bond (as of January 2023
Maturity: 1/15/2033 Coupon rate (%): 3.000 Bid price: 95.3000 Asked price: 95.5000 Asked yield (%): 3.538 Story problem: Assume the Treasury quote above is for a bearer bond. Jennifer is an investor who buys $500,000 of par value from the dealer and holds the bond to maturity. Mat is an investor who sells $500,000 of par value to the dealer.
How much money did the dealer earn on his transactions with Jennifer and Mat? In other words, how much did the dealer make on the spread?
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