The U.S. government borrows money by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. On JuneJune 33, 2003, Kris Greenhalgh purchased a 184184-day, $40004000 U.S. Treasury bill at a 4.734.73% discount. On the date of maturity Kris received $40004000. Complete parts a) through d). One way the U.S. government borrows money is by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. When an investor purchases a Treasury bill, the purchase price is the face value of the Treasury bill minus the interest paid by the U.S. government on the maturity date. For example, if a Treasury bill has a face value of $5000 and the interest that will be paid by the U.S. government on the maturity date is $200, then the purchase price of the Treasury bill will be $5000minus−$200 or $4800. When the Treasury bill reaches its maturity date, the investor is paid the face value of the Treasury bill. Question content area bottom Part 1 a) What is the date of maturity of the Treasury bill? The date of maturity of the Treasury bill is December 4, 2003 Part 2 b) How much did Kris actually pay for the Treasury bill? $enter your response here (Round to the nearest cent.)
The U.S. government borrows money by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. On JuneJune 33, 2003, Kris Greenhalgh purchased a 184184-day, $40004000 U.S. Treasury bill at a 4.734.73% discount. On the date of maturity Kris received $40004000. Complete parts a) through d). One way the U.S. government borrows money is by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. When an investor purchases a Treasury bill, the purchase price is the face value of the Treasury bill minus the interest paid by the U.S. government on the maturity date. For example, if a Treasury bill has a face value of $5000 and the interest that will be paid by the U.S. government on the maturity date is $200, then the purchase price of the Treasury bill will be $5000minus−$200 or $4800. When the Treasury bill reaches its maturity date, the investor is paid the face value of the Treasury bill. Question content area bottom Part 1 a) What is the date of maturity of the Treasury bill? The date of maturity of the Treasury bill is December 4, 2003 Part 2 b) How much did Kris actually pay for the Treasury bill? $enter your response here (Round to the nearest cent.)
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
Related questions
Question
The U.S. government borrows money by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. On
JuneJune
33,
2003, Kris Greenhalgh purchased a
184184-day,
$40004000
U.S. Treasury bill at a
4.734.73%
discount. On the date of maturity Kris received
$40004000.
Complete parts a) through
d).
One way the U.S. government borrows money is by selling Treasury bills. Treasury bills are discounted notes issued by the U.S. government. When an investor purchases a Treasury bill, the purchase price is the face value of the Treasury bill minus the interest paid by the U.S. government on the maturity date. For example, if a Treasury bill has a face value of $5000 and the interest that will be paid by the U.S. government on the maturity date is $200, then the purchase price of the Treasury bill will be
$5000minus−$200
or $4800. When the Treasury bill reaches its maturity date, the investor is paid the face value of the Treasury bill.Question content area bottom
Part 1
a) What is the date of maturity of the Treasury bill?
The date of maturity of the Treasury bill is
December 4, 2003
Part 2
b) How much did Kris actually pay for the Treasury bill?
$enter your response here
(Round to the nearest cent.)Expert Solution
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