A $100,000, 156-day Government of Canada Treasury bill was purchased on its date of issue to yield 1.9%. (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. What price did the investor pay? Purchase price 2$ 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 (i) 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- (ii1)r
A $100,000, 156-day Government of Canada Treasury bill was purchased on its date of issue to yield 1.9%. (Do not round intermediate calculations and round your final answers to 2 decimal places.) a. What price did the investor pay? Purchase price 2$ 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 (i) 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- (ii1)r
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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Transcribed Image Text: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
(i) 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).
(i) r =
(ii) r
(iii)r
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