A Treasury bond is quoted as 101: 18 asked and 101:
16 bid.What is the bid-ask spread in dollars on a $1,000 face value bond?

Question

Quizplus · Accepted Answer

To find the bid-ask spread in dollars, we need to calculate the difference between the asked price and the bid price, and then multiply by $10 (since each point in bonds is equal to $10).

101:18 - 101:16 = 2/32 = 0.0625

The bid-ask spread in dollars is 0.0625 x $10 x $1,000 = $625.

Therefore, the correct answer is C.

A Treasury Bond Is Quoted as 101: 18 Asked and 101