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A treasury note with a maturity of ten years and a coupon interest rate of 3.08%...

A treasury note with a maturity of ten years and a coupon interest rate of 3.08% was quoted at a price of 97.20. What is this T-notes yield to maturity?

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Answer #1

YTM is the rate at which PV of Cash Inflows are equal to bond price.

YTM = Rate at which least +ve diff + [ Diff at that rate / change in diff ] * change in Int rate

= 3% + [ 3.48 / 8.14 ] * 1%

= 3% + 0.43%

= 3.43%

YTM is 3.43%

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