Ninety days ago, you purchased a 180-day Treasury bill with a face value of $2 million. At that time, the yield to maturity on the bill was 8.0% p.a. The current yield to maturity on the bill is 6.0% p.a. The price of the bill today is closest to: O $1,961,311. O $1,970,842. O $1,924,091. O $1,942,523.

Ninety days ago, you purchased a 180-day Treasury bill with a face value of $2 million. At that time, the yield to maturity on the bill was 8.0% p.a. The current yield to maturity on the bill is 6.0% p.a. The price of the bill today is closest to: O $1,961,311. O $1,970,842. O $1,924,091. O $1,942,523.

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

See similar textbooks

Similar questions

An investor purchased a 91-day, $10,000.00 T-bill on its issue date for $9915.98. After holding it for 66 days, she sold the T-bill for a yield of 3.01% (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? GOOOD (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.) (c) 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)
You bought a 90-day bank bill 30 days ago. The face value of the bill is $100,000. The yield on this bill was 5% per annum. Today, when you sell the bank bill, the yield has increased to 6%. What is your return holding the bank bill?
Fourteen years ago, the Archer Corporation borrowed $7050,000. Since then, cumulative inflation has been 51 percent (a compound rate of approximately 3 percent per year). a. When the firm repays the original $7,050,000 loan this year, what will be the effective purchasing power of the $7,050,000? (Hint Divide the loan amount by one plus cumulative inflation.) (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Effective purchasing power b. To maintain the original $7,050.000 purchasing power, how much should the lender be repaid? (Hint: Multiply the loan amount by one plus cumulative inflation.) (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Loan repayment
Pharoah Company will receive $395000 in 7 years. If the appropriate interest rate is 9%, the present value of the $395000 receipt is $722076. $217250. $612250. $216077.
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
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
= You were just notified that you will receive $100,000 in two months from the estate of a deceased relative You want to invest this money in safe, interest-bearing instruments, so you decide to purchase five-year Treasury notes. You believe, however, that interest rates are headed down, and you will have to pay a lot more in two months than you would today for five-year Treasury notes. You decide to look into futures, and find a quote of 108-28.7 for five-year Treasuries deliverable in two months (contracts trade in $100,000 units and require an initial margin is $680). What does the quote mean in terms of price, and how many contracts will you need to buy? How much money will you need to buy the contract, and how much will you need to settle the contract? XO 5-year Treasury notes are quoted at a par value of $100,000. Which of the following is the best answer? (Select the best answer below.) OA. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into…
After a 1 year investment you receive 7.5% interest (nominal) from your bank. However, looking at how prices have changed, you soon realize that the real rate of interest was actually 1.6%. How much was inflation during that year? Enter your answer as a percentage, rounded to 2 decimals, and without the percentage sign ('%'). For example, if your answer is 0.02345, then enter 2.35
Z company paid TL 10000000 at the end of the 20th year for its 7.5% interest rate and 20-year maturity loan from XYBANK. What would be the annual cash amount if the company paid this loan in equal installments?
Assume you paid $9,700 for the 10-year T-note cited in question 12. This 10-year T-note has exactly 10-years remaining until final maturity. What is the Yield until Maturity or YTM for this 10-year T-note?
Ninety days ago, you purchased a 180-day Treasury bill with a face value of $100,000. At that time, the yield to maturity on the bill was 5.0% p.a. If the yield to maturity on the bill is now 4.0% p.a. the bill's price today is closest to: a.$97,594. b.$98,066. c.$98,782. d.$99,023.
An asset was issued 11 months ago. The asset promised to make semi-annual payments (one payment every six months) of $80 each, from the date of issuance, for two years. All payments are equally risky and thus they have the same discount rate. You've decided that the discount rate is 12%. According to these numbers, how much is the asset worth to you today? Round your answer to the NEAREST DOLLAR.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS