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What does a Treasury Note at 105:16 mean?
If an investor purchases a 8 1/2s 2001 Feb. $10,000 par Treasury Note at 105:16 and holds it for exactly one year, what is the rate of return if the selling price is 105:16?
Your answer: D was incorrect. The correct answer was A) 8.06%.
Purchase Price = [(105 + 16/32)/100] x 10,000 = $10,550.00
Selling price = [(105 + 16/32)/100] x 10,000 = $10,550.00
Interest = 8 1/2% of 10,000 = $850.00
Return = (P end - P beg + Interest)/P beg = (10,550.00 - 10,550.00 + 850.00)/10,550.00 = 8.06% [em06] | 
发表于 2006-4-16 21:00
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