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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A 3 month $19,000 treasury bill with a simple annual discount rate of 0.27% was sold in 2016. Assume 365 days in a year a) the price of the T bill was ? b) the actual interest rate paid by the treasury is ?
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.
The Treasury Department auctioned $33 billion in 3-month bills in denominations of $10,000 at a discount rate of 6.300%. What would be the effective rate of interest? Note: Use calendar year. Do not round intermediate calculations. Round your answer to the nearest hundredth percent.
The figure shows a graph that compares the present values of two ordinary annuities of $900 quarterly, one at 5% compounded quarterly and one at 9% compounded quarterly. Dollars 70000 60000 50000 40 000 30.000 20 000 10000 0 20 40 60 80 100 120 140 Quarters @ (a) Determine which graph corresponds to the 5% rate and which corresponds to the 9% rate. The higher graph is the one at 5% and the lower one is the one at 9% O The lower graph is the one at 5% and the higher one is the one at 9% (b) Use the graph to estimate the difference (in dollars) between the present values of these annuities for 25 years (100 quarters) $1078497
Click to see additional instructions Rounded to two decimal places as a percent, the yield on a new-issue one-year T-bill priced at $984.50 is
An investor purchased a 182-day, $100,000.00 T-bill on its issue date for $98,838.39. After holding it for 109 days, she sold the T-bill for a yield of 2.28% (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? (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) (e) 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.)

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