# How are bond prices quoted in the financial press related to bond yields quoted?

For example in the FT this month a 10 year US bond with redemption date 05/24, coupon 2.50 has a bid price of 99.52 and a bid yield of 2.56.

Can one calculate the bid yield from the bid price, red date and coupon?

I thought that the bid yield should be the rate y at which if you discount the cash flows of (6 months, 1.25), (1 year, 1.25), ........., (10 years,101.25) at the rate of y and sum these up you should get the bid price. But I dont get this. If i take the quoted bid yield of 2.56 - I get a bond price of 99.33.

For a shorter example - a 2 year US bond with red date of 06/16, coupon 0.50 has bid price 100.02 and bid yield of 0.49.

Can someone help?

The accrued interest is 0.014946 ( =(8/11/2014 – 7/31/2014) / (1/31/2015 – 7/31/2014) * 0.5 / 2). Therefore, the dirty price is $100.1406 + 0.014946 = 100.1555457$. The yield to maturity is 0.4282479%, and can be solved from
$$100.1406 + 0.014946 = \frac{0.25}{(1+y/2)^{0.940217}} + \frac{0.25}{(1+y/2)^{1.940217}} + \frac{0.25}{(1+y/2)^{2.940217}} + \frac{100.25}{(1+y/2)^{3.940217}}.$$