A Treasury Note with a Maturity of 2 Years Pays

question 24

Multiple Choice

A Treasury note with a maturity of 2 years pays interest semi-annually on a 9 percent annual coupon rate. The $1,000 face value is returned at maturity. If the effective annual yield for all maturities is 7 percent annually,what is the current price of the Treasury note?

• A) $960.68
• B) $986.69
• C) $1,010.35
• D) $1,034.40
• E) $1,038.99

---

Definitions:

Transaction

A business deal or exchange between two or more parties.

Imperfect Estimates

Approximations or judgments about values or quantities that may lack precision or complete accuracy, often due to insufficient information or inherent unpredictability.

Older Homes

Residential properties that have been constructed many years ago, often characterized by historical architectural styles and potentially requiring more maintenance.

House's Value

The monetary worth assigned to a residential property based on factors like location, size, and condition.