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%?

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

Section: Chapter Questions

Problem 1PS

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A 3 month $19,000 treasury bill with a simple annual discount rate of 0.27% was sold in 2016. Assume 365 days in a year a) the price of the T bill was ? b) the actual interest rate paid by the treasury is ?
Consider an investor who purchases a Treasury inflation-indexed note with an original principal amount of $100,000, a 2.875 percent annual coupon rate (coupon is paid semiannually), and 10 years to maturity. The semiannual inflation rate during the 6 months ending 3 months before the first coupon payment (the 3-month lag is necessary to allow for the release of the official CPI figures) is 0.97 percent. Over the next 6-month period inflation is 0.40 percent. Calculate the adjusted principal amount for the second coupon payment. Round the answer to two decimal places. Your Answer:
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D6) Finance URGENT!! demonstrate that the effective cost of funds for a $40 million 90-day bank bill issue in April is the forward rate established in June (when 30 August BAB futures are sold at 97.45), rather than the BBSW of 3.05% when the bills are issued in june
The current price of silver is $70.7 per ounce. The storage cost is 4.9% per annum with continuous compounding. Assuming that interest rates are 8.4% per annum with continuous compounding for all maturities, calculate the futures price of silver for delivery in 23 months G
On April 1, $10,000.00 364-day treasury bills were auctioned off to yield 2.63%. (a) What is the price of each $10,000.00 T-bill on April 1? (b) What is the yield rate on August 21 if the market price is $9,772.94? (c) Calculate the market value of each $10,000.00 T-bill on October 14 if the rate of return on that date is 3.264%. (d) What is the rate of return realized if a $10,000.00 T-bill purchased on April 1 is sold on November 25 at a market rate of 3.61%?
Click to see additional instructions Rounded to two decimal places as a percent, the yield on a new-issue one-year T-bill priced at $984.50 is
An investor purchased a 182-day, $100,000.00 T-bill on its issue date for $98,838.39. After holding it for 109 days, she sold the T-bill for a yield of 2.28% (a) What was the original yield of the T-bill? (b) For what price was the T-bill sold? (c) What rate of return (per annum) did the investor realize while holding this T-bill? (a) The original yield of the T-bill was% (Round the final answer to two decimal places as needed. Round all intermediate values to six decimal places as needed) (b) The T-bill sold for $ (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed) (e) The investor realized a rate of return of (Round the final answer to two decimal places as needed Round all intermediate values to six decimal places as needed.)

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