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Treasury notes and bonds. For Problems 1 through 5, use the information

in the following table.

 

 

1. What is the price in dollars of the February 2000 Treasury note if its par value is $100,000? Verify the current yield of this note.

 

2. What is the yield to maturity of the August 2005 Treasury bond? Compare the yield to maturity and the current yield. How do you explain this relationship?

 

3. What is the price of the August 2003 Treasury bond (assume a $100,000 par value) with the yield to maturity from the table? Verify the current yield. Why is the current yield higher than the yield to maturity?

 

4. What is the yield to maturity of the February 1995 Treasury bond based on the price in the table? Verify the current yield. Why is the current yield higher than the yield to maturity?

 

5. What pattern do you see in the yield to maturity of these Treasury notes and bonds?

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