# capital markets

Hi can anybode help me in this question....With one numerical example show how government bonds are priced and
their yields are calculated, and also explain how they provide the benchmark
for the cost of funds for other borrowers?

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1. You can read about how U.S Treasury bond prices are calculated at
http://financial-dictionary.thefreedictionary.com/Dutch+auction

For the effective interest rate or "Yield to maturity", see
http://www.moneychimp.com/articles/finworks/fmbondytm.htm

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