You purchase a 10 1/4s February $10,000 par Treasury Note at 102:15 and hold it for exactly one year at which time you sell it.What is your rate of return if your selling price is 104:14?
A) 11.92%
B) 8.16%
C) 8.55%
D) 8.61%
E) 10.25%

Question

Quizplus · Accepted Answer

Purchase Price = [(102 + 15/32)¸ 100] × 10,000 = $10,246.875
Selling Price = [(104 + 14/32)¸ 100] × 10,000 = $10,443.75
Interest = 10 1/4% of 10,000 = $1,025.00
 $\begin{aligned}
\text { Return } &=\left(P_{\text {end }}-P_{\text {beg }}+\text { Interest }\right) \div P_{\text {beg }} \
&=(10,443.75-10,246.875+1,025.00) \div 10,246.875 \
&=11.92 \%
\end{aligned}$

You Purchase a 10 1/4s February $10,000 Par Treasury Note