A Treasury Bond Is Quoted at a Price of 104:18

question 349

Multiple Choice

A Treasury bond is quoted at a price of 104:18 with a 4.75% coupon. The bond pays interest semiannually. What is the current yield on one of these bonds?

• A) 4.49%
• B) 4.54%
• C) 4.61%
• D) 4.64%
• E) 4.72%

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, typically within a year.

Beta

A measure of a stock's volatility in relation to the overall market, indicating the stock's risk compared to that of the average market risk.

Risk Level

The degree of uncertainty or potential financial loss inherent in an investment decision.

Standard Deviation

An indicator of the degree of spread or diversity within a collection of numbers.