WASHINGTON - The Treasury yesterday sold $17.04 billion of two-year notes at a yield of 4.28%, up from the 4.27% yield incurred in the previous auction on Nov. 22 and the highest since the 4.28% incurred Jan. 26.

The coupon rate was 41/4%, unchanged from the previous auction. The price was 99.943.

In the Dutch auction, all competitive tenders at yields below 4.28% were accepted in full. Buyers who bid at the high yield of 4.28% were allotted 32% of their total bids. The median yield was 4.27%, and the low yield was 4.22%.

Tenders totaled $47.29 billion and the Treasury accepted $17.04 billion, including $793 million of noncompetitive bids.

Federal Reserve banks bought $690 million of the securities, as agents for foreign and international monetary authorities, in exchange for maturing securities.

The Fed banks also bought $ 1.55 billion for their own account in exchange for maturing securities.

The notes will mature December 31, 1995.

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