The UK Government has issued a 25-year bond with a face value of £2,000.The semi-annually paid coupon is 5.3% per annum, and the yield to maturity(YTM) is 7%. Calculate the future value of reinvested coupons at maturity ofthe bond at 5% per annum.

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.