TransWikia.com

How to calculate a bond’s asked price from the previous day?

Personal Finance & Money Asked on December 29, 2020

I’m studying investment on my own. I’m learning about treasury bonds and there’s a question about calculating the asked price the previous day. It provides the answer but I don’t understand where the number came from.

Yield of maturity is 4.25%

Bid price 98:26

Asked price 98:29

Change -20

Ask yield 4.3156

Answer:

The bond sells for 98:26 which is a price of 98.813% of par or $988.13 and 98:29 ask or $989.06

This ask price corresponds to a yield of 4.3156%
The ask price fell 20/32 from its level yesterday, so the ask price then must have been 99.17 or $995.31

*Where’s does the 99.17 or $995.31 coming from? How do I calculate that? And why is 20/32? -20 is the change but where do 32 this number coming back?

Sorry it may sounds silly but I am studying on my own so I’m bit confused*

Add your own answers!

Ask a Question

Get help from others!

© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP