You purchase a 11 3/8s February $10,000 par Treasury Note at 103:11 and hold it for exactly one year at which time you sell it.What is your rate of return if your selling price is 100:13?
A) 10.14%
B) 11.75%
C) 8.22%
D) 8.32%
E) 8.16%

Question

Quizplus · Accepted Answer

Purchase Price = [(103 + 11/32)¸ 100] × 10,000 = $10,334.375
Selling Price = [(100 + 13/32)¸ 100] × 10,000 = $10,040.625
Interest = 11 3/8% of 10,000 = $1,137.50
 $\begin{aligned}
\text { Return } &=\left(P_{\text {end }}-P_{\text {beg }}+\text { Interest }\right) \div P_{\text {beg }} \
&=(10,040.625-10,334.375+1,137.50) \div 10,334.37 \
&=8.16 \%
\end{aligned}$

You Purchase a 11 3/8s February $10,000 Par Treasury Note