Using the Wall Street Journal , obtain the closing Asked Price and Asked Yield of the 2029 Aug 15, 6.125% coupon Treasury bond for the date January 24, 2017. (Note that this bond has semi-annual coupon payments).
You may find the information in the Market Data section, Market Data Center, US Treasury Quotes, Treasury Notes and Bonds.
a.) What is the Asked Price as quoted in the WSJ? What is the Asked Yield as quoted in the WSJ?
b.) Calculate and verify the Asked Price from Part A using the discounting and compounding techniques we reviewed in class. You may use Excel functions as a check on your answer but not to answer the question. Assume there are 184 days between coupon payments. Is this the clean or dirty price? (Note - the price you calculate may be up to $0.10 off).
c.) Using the Excel Yield function and WSJ-quoted price of the bond, calculate and verify the Asked Yield from Part A. (Note - using a day count convention of 1 you should be able to match the yield within 1 bps).