The price quotations of Treasury bonds in the Wall Street Journal show an ask price of 104.25 and a bid price of 104.125.As a buyer of the bond, what is the dollar price you expect to pay?

Question

Quizplus · Accepted Answer

The ask price is the price at which you can buy the bond, which is 104.25% of its face value. Since Treasury bonds have a face value of $1,000, the dollar price you expect to pay is 104.25% of $1,000, which equals $1,042.50.

The Price Quotations of Treasury Bonds in the Wall Street