Question

The price of 10-year Treasury note is quoted at 99.10.

a) The interest payment is 0.90% of par value.
b) The market price is 99.10% of face value.
c) The yield to maturity is 0.90%.
d) Investor receives $99.10 at maturity.

Answer 1

The market price of a 10-year Treasury note quoted at 99.10% of face value indicates that the investor will receive $991.10 at maturity.

Step-by-step explanation:

When the price of a 10-year Treasury note is quoted at 99.10, it means that the market price is 99.10% of the face value, or $991 for every $1,000 face value. This is answer b.

The yield to maturity refers to the total return on the bond, which includes both interest payments and capital gains. It is not directly related to the quoted price. Answer c is incorrect.

The interest payment on the note is 0.90% of the par value, or $9 for every $1,000. Answer a is incorrect.

The investor will receive $991.10 at maturity, which is the market price quoted. Answer d is correct.