You are asked to find the price of the US Treasury note. The following table gives the prices of two out of three US Treasury notes for settlement on August 30, 2012. All three notes will mature exactly one year later on August 30, 2013. Assume annual coupon payments and that all three bonds have the same coupon payment date.
COUPON PRICE
5% 97.5
7% ?
8% 103.2
Approximately what would be the price of the 4 1/2 US Treasury note?
Choose one answer.
a. 99.64 Incorrect
b. 98.20 Incorrect
c. 98.64 Correct
d. 100.20 Incorrect
COUPON PRICE
5% 97.5
7% ?
8% 103.2
Approximately what would be the price of the 4 1/2 US Treasury note?
Choose one answer.
a. 99.64 Incorrect
b. 98.20 Incorrect
c. 98.64 Correct
d. 100.20 Incorrect