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A Treasury bond is quoted as 99:18 asked and 99:09 bid. What is the bid-ask spread in dollars on a $5,000 face value bond?

User Asmus
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Final answer:

The bid-ask spread in dollars on a $5,000 face value bond would be $1,406.25.

Step-by-step explanation:

The bid-ask spread in dollars can be calculated by first converting the quoted prices into decimal form. The asked price of 99:18 can be converted to 99.5625 and the bid price of 99:09 can be converted to 99.28125. The difference between the two is 0.28125. Therefore, the bid-ask spread in dollars on a $5,000 face value bond would be 0.28125 multiplied by $5,000, resulting in a spread of $1,406.25.

User Robsonsjre
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