Question

The price quotations of Treasury bonds in the Wall Street Journal show an ask price of 104.25 and a bid price of 104.125.

Answer 1

As a seller we would receive $1,041.25

Solution:

You may receive the bid price of the dealer, $104.125\%$ of $1,000, or $1,041.25

Prices of treasury bonds are expressed as par value amounts.  

The quote price of 104:25 means that the bond is priced at $(104 + \frac{25}{100})\%= 104.25\%$ of the par value.  

Therefore, if the debt is $1,000, the dollar values to be charged by the borrower should be $1,000\times104.25\% = \ 1,041.25$