The US Treasury has decided to issue $1billion worth in ten-year debt. There are currently 4 primary dealers that will help in distributing the issue via competitive bids.There are a total of $100million in non-competitive bids. The table below lists each dealers bid:

How many bonds (in $million) does each dealer get? Ignore the 35% limit on competitive bids. What would you expect the coupon rate of the ten-year issue to be near? Explain your reasoning.

Bidder Bid (%) Quantity (Smn) JP Morgan UBS RBC Bank Goldman Sachs 2 3 2.2 2.5 400 200 300 400 Bidder Bid (%) Quantity (Smn) JP Morgan UBS RBC Bank Goldman Sachs 2 3 2.2 2.5 400 200 300 400