Question

The price quotations of treasury bonds in the wall street journal show a bid price of 104.5313 and an ask price of 104.5489. if you sell a treasury bond, you expect to receive _______.

Answer 1

If you sell a treasury bond, you expect to receive is bid price of 104.5313

How are bid and ask prices designed?

Bid and ask prices are designed such that the dealer in treasury bonds is at an advantage at all times, which means that sell higher and buy at lower prices so that their profit margin is the difference between the ask and bid prices.

The price an investor would sell is the bid price, which is lower than the ask price, the price the investor would purchase treasury bonds from the dealer.

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