Answer :
To determine the quoted bid price of a Treasury note in the Wall Street Journal, we must understand how Treasury notes are typically quoted. Treasury securities are usually quoted in fractions of a dollar.
In this specific case, the Treasury note has a bid price of $995. The notes are quoted as a percentage of their face value, which is typically $1,000.
Here are the steps to convert the dollar bid price to the quoted price:
Calculate the price as a percentage of the face value:
[tex]\text{Percentage} = \left( \frac{\text{Bid Price}}{\text{Face Value}} \right) \times 100[/tex]
Substituting the given values, we have:
[tex]\text{Percentage} = \left( \frac{995}{1000} \right) \times 100 = 99.5 \%[/tex]Express 99.5% as a bond price quote:
Treasury notes are quoted in 32nds of a dollar. To convert the decimal portion to 32nds, multiply by 32:
[tex]0.5 \times 32 = 16[/tex]Therefore, the quoted bid price is "99:16".
This means that for a Treasury note with a bid price of $995, the quotation in the Wall Street Journal would be written as 99:16.
Thus, the correct answer is B) 99:16.
