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.)

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.)

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
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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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