A T-bill with face value $10,000 and 87 days to maturity is selling at a bank discount ask yield of 3.4%. Required: a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Price of the bill b. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.)

A T-bill with face value $10,000 and 87 days to maturity is selling at a bank discount ask yield of 3.4%. Required: a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Price of the bill b. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.)

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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The time from acceptance to maturity on a $1,000,000 banker's acceptance is 120 days. The importer's bank's acceptance commission is 1.75 percent and the market rate for 120-day B/As is 5.75 percent. What amount will the exporter receive if he holds the B/A until maturity? If he discounts the B/A with the importer's bank? Also determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter. If the exporter's opportunity cost of capital is 11 percent, should he discount the B/A or hold it to maturity? (Do not round intermediate calculations. Round "Maturity value" to 2 decimal places. Round "Bond equivalent yield" as a percent rounded to 2 decimal places.) Amount the exporter will receive at maturity Amount the exporter will receive if discounted Bond equivalent yield Should he discount the B/A or hold it to maturity? Discount the B/A %
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Fast pls solve this question correctly in 5 min pls I will give u like for sure Surbh
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