Question: 1) Consider an original 2-year US Treasury note with a 4% coupon expiring on 06/15/2019 If this note sells at 101 in the bond market,

1) Consider an original 2-year US Treasury note with a 4% coupon expiring on 06/15/2019

If this note sells at 101 in the bond market, what would be its yield to maturity?

2) A treasury note with a coupon rate of 3% and expiring on February 15, 2020 has a current bid quote of 98-31. Another treasury note also expiring on February 15, 2020 offers a coupon rate of 5% and has a current bid quote of 99-01. Explain why these two treasury notes, which expire on the same date, pay a different coupon, and therefore are offered at a different price and yield.

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