Question

Assuming a $100,000 par value, calculate the dollar price for the following Treasury coupon securities given the quoted price.

(a) The quoted price for a $100,000 par value Treasury coupon security is 87.14. What is the dollar price?

(b) The quoted price for a $100,000 par value Treasury coupon security is 84.14+. What is the dollar price?

(c) The quoted price for a $100,000 par value Treasury coupon security is 103.059. What is the dollar price?

Answer 1

Solution:

The formula for calculating the Dollar price of a security = ( Par value of the security * Quoted Price )

(a) As per the information given in the question we have

Par value of the Treasury Coupon Security = $ 100,000   ; Quoted Price = 87.14 %

Applying the above values in the formula we have

The Dollar Price of the Treasury Coupon Security = $ 100,000 * 87.14 % = $ 87,140

(b) As per the information given in the question we have

Par value of the Treasury Coupon Security = $ 100,000 ; Quoted Price = 84.14 %

Applying the above values in the formula we have

The Dollar Price of the Treasury Coupon Security = $ 100,000 * 84.14 % = $ 84,140

(c ) As per the information given in the question we have

Par value of the Treasury Coupon Security = $ 100,000   ; Quoted Price = 103.059 %

Applying the above values in the formula we have

The Dollar Price of the Treasury Coupon Security = $ 100,000 * 103.059 % = $ 103,059