A Treasury bond is quoted at a price of 100:07 with a current yield of 6.4858%. What is the coupon rate?

Question

Quizplus · Accepted Answer

The coupon rate can be found by multiplying the quoted price by the current yield. The quoted price of 100:07 means $100.21875 (since 07/32 = 0.21875). The current yield is given as 6.4858%. Therefore, the annual interest payment is $100.21875 * 6.4858% ≈ $6.50. Hence, the coupon rate is 6.50%.

A Treasury Bond Is Quoted at a Price of 100:07