# In a Treasury bond maturing in May 2040, assume a $1,000 par value. What is the bid-ask spread... ## Question: In a Treasury bond maturing in May 2040, assume a$1,000 par value.

What is the bid-ask spread in dollars? (Do not round intermediate calculations. Round answer to 3 decimal places (e.g., 32.162).)

The bid-ask spread in dollars is $0.200 For the quotes, we refer to the wall street journal with the current quotes. The link used is: https://www.wsj.com/market-data/bonds/treasuries Quotes as on 7th January 2020: MATURITY COUPON BID ASKED CHG ASKED YIELD 5/15/2040 4.375 136.1400 136.1600 -0.1720 2.151 The bid-ask spread is the difference in the bid and ask quote = 136.1600 - 136.1400 =0.0200 Since the quote for treasury are per$100 par, we multiply the difference by 10 to get the dollar bid-ask spread for a face value of $1,000. The bid-ask spread is hence$0.0200 * 10