Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. What is HPR, APR and EAR(effective annual rate of return) for this investment? O 6.38%, 6.38% and 12.77% O 6.38% , 12,77% and 13.17% O 6.38%, 12.77% and 1.13%

Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. What is HPR, APR and EAR(effective annual rate of return) for this investment? O 6.38%, 6.38% and 12.77% O 6.38% , 12,77% and 13.17% O 6.38%, 12.77% and 1.13%

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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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. What is the
HPR, APR and EAR(effective annual rate of return) for this investment?
6.38%, 6.38% and 12.77%
6.38%, 12,77% and 13.17%
O 6.38%, 12.77% and 1.13%
O None of the above

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