I am new to Treasury's but I am looking to purchase a one year Treasury Note on the secondary market through Fidelity. But when I search Treasury Notes on Fidelity I see the coupon rate at 1.125, the yield at 2.789 and the yield to worst and the yield to maturity at 2.754. I think I would possibly receive the YTM at 2.754 but unsure how the coupon rate at 1.125 figures into the picture?
Thanks
Yes, you would receive a yield to maturity of 2.754%. You purchase the note at a discount (at 98.3 or so) and when the note matures, you are paid off at the full value. For one note, you would pay $983 and get back $1000 after a year. In addition, you would receive $11.25 worth of interest (from the coupon). In total, you make about $27 from your initial investment of $983. I think that will be close to 2.754%.
The other yield you mention, the 2.789% is the yield for the highest bid value. It is higher than the other yield because it is computed with a smaller purchase price.