The example below will highlight the Dutch auction process for U.S. government securities. Assume the following bids were received by the BFS for a planned issue of $1,000,000 of 13-week T-Bills. Non-competitive Bids A total of 6 non-competitive bids amounting to $200,000 was received. Competitive Bids A total of five competitive bids was received. a. $250,000 at 3.1% b. $300,000 at 3.0% c. $175,000 at 2.9% d. $300,000 at 2.8% e. $200,000 at 2.7% Since only $800,000 will be allocated to the competitive bidders, the selection will begin at the bottom at 2.7% and move up till the desired amount is reached. In this example, the rate that clears $800,000 is a. 3.1% b.3.0% c. 2.9% d. 2.8% e. 2.7% a b c d e
The example below will highlight the Dutch auction process for U.S. government
securities. Assume the following bids were received by the BFS for a planned issue of $1,000,000
of 13-week T-Bills.
Non-competitive Bids
A total of 6 non-competitive bids amounting to $200,000 was received.
Competitive Bids
A total of five competitive bids was received.
a. $250,000 at 3.1%
b. $300,000 at 3.0%
c. $175,000 at 2.9%
d. $300,000 at 2.8%
e. $200,000 at 2.7%
Since only $800,000 will be allocated to the competitive bidders, the selection will begin at the
bottom at 2.7% and move up till the desired amount is reached. In this example, the rate that
clears $800,000 is
a. 3.1%
b.3.0%
c. 2.9%
d. 2.8%
e. 2.7%
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