To determine the yield to maturity (YTM) for the Treasury bond that matures in May 2034, we need to use the given data and the YTM formula. The given data for the bond maturing in May 2034 are as follows:

• Coupon Rate: 5.952%
• Bid Price: 104.4874
• Asked Price: 104.6331
• Change: +.4221
• Maturity: May 2034

Since we need to find the YTM for the bond, we use the asked price in our calculations. Here are the steps:

1. Determine the number of years to maturity:

   • Current date: May 2022
   • Maturity date: May 2034
   • Years to maturity: 2034 - 2022 = 12 years

2. Coupon Payment:

   • Coupon rate = 5.952%
   • Annual coupon payment = 5.952% of $1,000 = $59.52
   • Since the bond pays semiannual coupons, each coupon payment is $\frac{59.52}{2} = \$29.76$.

3. Determine the Yield to Maturity (YTM): The YTM is the interest rate $y$ that equates the present value of the bond’s cash flows to its current price. The bond’s cash flows consist of semiannual coupon payments and the par value paid at maturity.

   The present value formula for the bond is: $P = \sum_{t=1}^{N} \frac{C}{(1 + \frac{y}{2})^t} + \frac{F}{(1 + \frac{y}{2})^N}$ where:

   • $P$ = current bond price (asked price = 104.6331% of par value = $1,046.331)
   • $C$ = semiannual coupon payment ($29.76)
   • $F$ = par value ($1,000)
   • $y$ = annual yield to maturity
   • $N$ = total number of semiannual periods (12 years * 2 = 24)

   We will use a financial calculator or iterative numerical methods (such as the Newton-Raphson method) to solve for $y$. For simplicity, we'll assume using a financial calculator here.

4. Calculating using a financial calculator: Enter the following values:

   • $N = 24$
   • $PMT = 29.76$
   • $FV = 1,000$
   • $PV = -1,046.331$

   Solving for $I/Y$ (the semiannual yield), we get:

   $\text{Semiannual YTM} = 2.8100\% \text{ (approx)}$

   Since this is the semiannual yield, we double it to get the annual YTM:

   $\text{Annual YTM} = 2 \times 2.8100\% = 5.6200\%$

Therefore, the yield to maturity (YTM) if you buy this bond is 5.62%.

Summary

The Treasury bond maturing in May 2034 has a yield to maturity (YTM) of 5.62%.

Do you want details or have any questions?

Here are five relative questions for further exploration:

1. How is the bid price different from the asked price, and why does it matter?
2. What factors influence the yield to maturity of a bond?
3. How do changes in interest rates affect bond prices and yields?
4. What are the risks associated with investing in Treasury bonds?
5. How does the semiannual coupon payment impact the calculation of YTM?

Tip: Always consider the impact of inflation on the real return of your bond investments.