Treasury quotes

Treasury quotes express the prices of US government securities in the secondary market, and the convention depends on the security. Treasury bills are quoted on a discount yield basis — the quote is an annualized percentage discount from face value, not a dollar price. Because a higher discount means a lower price, a T-bill's bid yield is higher than its ask yield, which looks backwards until you remember that price and yield move inversely.

Treasury notes and bonds are quoted as a percentage of par value in 32nds of a point. A quote of 98-16 means 98 and 16/32 percent of par, or 98.5% — $985 for a $1,000 bond. A quote of 101-08 equals 101.25% of par, or $1,012.50. Some quote systems add a plus sign to indicate an extra 1/64th, so 98-16+ equals 98 and 33/64 percent of par.

This differs from corporate and municipal bond conventions: corporate bonds are quoted in 8ths of a point, and many municipal bonds are quoted on a yield basis. Recognizing which convention applies — and converting a 32nds quote into a dollar price — is a core skill for anyone working with government debt.

The SIE and Series 7 exams both test Treasury quotes. Expect questions asking you to convert a quote like 99-24 into a dollar price, to explain why a T-bill's bid appears higher than its ask, or to contrast Treasury quoting conventions with corporate bond quotes in 8ths.