Suppose that you purchase the T-bill maturing on September 15, 2020, for 9,991.362. The T-bill matures 122 days after the settlement date and has a face value of 10,000. The T-bill’s discount yield is _________.
1. Suppose that you purchase the T-bill maturing on September 15, 2020, for 9,991.362. The T-bill
matures 122 days after the settlement date and has a face value of 10,000. The T-bill’s discount
yield is _________.
2. Based from the above information, the T-bill’s bond equivalent is __________. The EAR on the Tbill is ___________.
3. The discount yield on the T-bill maturing on November 3, 2020 or 171 days from settlement date
is 0.328 percent. The price of the T-bill is ___________.
4. The overnight fed funds rate was 0.41 percent. The conversion of the fed funds rate to a bond
equivalent rate is ___________. The EAR on the fed funds is ___________.
5. Assume that a bank enters a repurchase agreement in which it agrees to buy fed funds at a price
of 15,000,000 with the promise to sell these funds back at a price of P15,000,926.345 after 12
days. The yield on this repo to the bank is ___________.
6. An investor purchases a 45-day commercial paper with a par value of 500,000 for a price of
494,256.025. The computed discount yield on the security is ______________.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
