On April 1, $25,000.00 364-day treasury bills were auctioned off to yield 3.29%. (a) What is the price of each $25,000.00 T-bill on April 1? (b) What is the yield rate on August 1 if the market price is $24,394.61? (c) Calculate the market value of each $25,000.00 T-bill on October 18 if the rate of return on that date is 3.891%. (d) What is the rate of return realized if a $25,000.00 T-bill purchased on April 1 is sold on November 16 at a market rate of 4.125%?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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On April 1, $25,000.00 364-day treasury bills were auctioned off to yield 3.29%.
(a) What is the price of each $25,000.00 T-bill on April 1?
(b) What is the yield rate on August 1 if the market price is $24,394.61?
(c) Calculate the market value of each $25,000.00 T-bill on October 18 if the rate of return on that date is 3.891%.
(d) What is the rate of return realized if a $25,000.00 T-bill purchased on April 1 is sold on November 16 at a market rate of 4.125%?
(a) The price is $ 24205.81
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(b) The yield rate is %.
(Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
Transcribed Image Text:On April 1, $25,000.00 364-day treasury bills were auctioned off to yield 3.29%. (a) What is the price of each $25,000.00 T-bill on April 1? (b) What is the yield rate on August 1 if the market price is $24,394.61? (c) Calculate the market value of each $25,000.00 T-bill on October 18 if the rate of return on that date is 3.891%. (d) What is the rate of return realized if a $25,000.00 T-bill purchased on April 1 is sold on November 16 at a market rate of 4.125%? (a) The price is $ 24205.81 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The yield rate is %. (Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed.)
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