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A Treasury bond is quoted with a price of 96-14. It has a coupon of 2.25%...

A Treasury bond is quoted with a price of 96-14. It has a coupon of 2.25% and a final maturity of 4/15/45 (and coupon payment dates of 4/15 and 10/15). The bond trades at that price on 12/7/16 on a regular way basis. The face amount of the transaction is $10 million.

What is the settlement date?

AND

What is the yield to maturity?

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Answer #1

In regular way, settlement date is one day after trade date (T+1).

In above case, Trade date is 12/7/2016 thus settlement date would be 12/8/2016

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

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