Question

A dealer in U.S. government securities quotes a 5-year Treasury note at 89.12-89.16. In dollars, that represents a spread of

Answer 1

0.00125

Step-by-step explanation:

In order to determine the spread of the dealer's quote, there is a need to undertstand that the first price quoted is known as bid price, which is the price the dealer is willing to purchase the securities while the second one is the ask price, the dealer's selling price.

From a conventional point of view(norm), the spread is the ask minus the bid price divided by 32 as shown thus:

spread=(89.16-89.12)/32=0.00125