SIE practice questionhardTreasury Securities
If a Treasury bond is quoted at 104.16, what is the dollar price?
- A$1,045.00
- B$1,041.60
- C$1,040.16
- D$1,046.25✓ Correct answer
Explanation
Why D — $1,046.25
104.16 means 104 and 16/32, or 104.5% of par ($1,000) = $1,045.00. However, 16/32 = 0.5, so 104.5 × $10 = $1,045, but the correct method is 104 16/32 = 104.5% = $1,045; this is a common source of confusion.
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