Cost of Treasury Notes
Quantitative Finance
Level
2
If you bought a $10,000 Treasury note with a quote of 102:21, what is the cost of the trade?
Ignore accrued interest
$221.00
$10265.625
$10221.00
$265.625
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1 solution
Treasury note prices are presented in 3 2 n d s . Therefore, 1 0 2 : 2 1 means $ 1 0 2 + 3 2 2 1 = 1 0 2 . 6 5 6 2 5 and a purchase of $ 1 0 , 0 0 0 face-value Treasury note costs $ 1 0 , 2 6 5 . 6 2 5 .