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Explain how Treasury notes and bonds are quoted and how to translate those quotes into the...

Explain how Treasury notes and bonds are quoted and how to translate those quotes into the market price.

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Answer #1

A typical quote has usually five headings for each note and bond:

ISSUE                   BID      ASK    CHANGE    YIELD 
6 1/2 8/15/05-N    105.08     12          +3            5.57

The issue includes interest(6 1/2) and maturity of august 15, 2005. The price Bid as well as ask are quoted at 1/32th of a dollar so 105.08 means 105 plus 8/32 th of a dollar = $105.25.
Ask would be 105 plus 12/32 of dollar.
change is also in 1/32 terms

A bons with facevalue of $1000 will thus have a price of $1052.50

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