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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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:
A $100,000, 156-day Government of Canada Treasury bill was purchased on its date of issue to yield 1.9%. (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. What price did the investor pay? Purchase price $4 b. Calculate the market value of the T-bill 82 days later if the rate of return then required by the market has: Market value (1) Risen to 2.2% (ii) Remained at 1.9% (iii)Fallen to 1.6% c. Calculate the rate of return actually realized by the investor if the T-bill is sold at each of the three prices calculated in Part (b). (1) r = (11) r (iii)r
On December 1, 2015, the U.S. Treasury issued a $1,000, 10-year inflation indexed notes with a coupon rate of 2% (paid semi-annually on Dec 1 and June 1). On the date of issue, the consumer price index (CPI) was 231, but had increased to 259 on December 1, 2020. What was the amount of the coupon payment made on December 1, 2020? Select one: a. $10.46 b. $11.21 c. $20.00 d. $22.42 e. None of the above.
On April 1, $10,000.00 364-day treasury bills were auctioned off to yield 1.91%. (a) What is the price of each $10,000.00 T-bill on April 1? (b) What is the yield rate on July 19 if the market price is $9,813.45? (c) Calculate the market value of each $10,000.00 T-bill on September 24 if the rate of return on that date is 2.75%. (d) What is the rate of return realized if a $10,000.00 T-bill purchased on April 1 is sold on December 16 at a market rate of 2.796%1 (a) The price is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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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%?
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A commercial bill with a face value of P500,000 has 45 days until maturity. If the relevant yield is 7% then what is the current price of this promissory note?

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