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Treasury Notes - Yield to Maturity

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18. You wish to price a new 2-year Treasury note with face value =$1,000, coupon rate = 4%. You observe the prices of two treasury securities already trading in the market. What would the price of new 2 year Treasury note? (Annual coupon payment)

o 1 year Treasury note with price = $980, coupon rate = 3%, face value = $1,000
o 2 year Treasury note with price = $1002, coupon rate = 4%, face value = $1,000.

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Solution Summary

The solution computes yield to maturity for given treasury notes data.

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