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You want to invest in US Treasury bonds and decide to buy 10,000 USD face...

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Finance

You want to invest in US Treasury bonds and decide to buy 10,000 USD face value of the US Treasury 2.25% Aug15, 1946 (annual coupon rate = 2.25%) for a settlement on June 1st, 1920. The last coupon payment happened on Feb 15th, 1920 and the next one is due on Aug 15th, 1920.

a) If the full price (cash price) is 10,029.14 USD, how much is the bonds quoted price at settlement?

b) What is the other name of the full and quoted price, what is the dierence between them and why do we need both?

c) Everything else equal, would there be any dierence in the quoted price if we changed 1920 to 1919 or 1921? Why? What would be the price and how that would be quoted?

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