ASAP[ A T-bill with face value $10,000 and 88 days to maturity is selling at a bank discount ask yield of 3.5%.Required:a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimalplaces.)Price of the billb. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimalplaces.)Bond equivalent yield%

Treasury bills are money market instruments issued by the Government of India as a promissory note…

Answered: What is the price of the bill? (Use 360…

What is the price of the bill? (Use 360 days a year. Do not round aces.) Price of the bill What is its bond equivalent yield? (Use 365 days a year. Do not r aces.) ond equivalent yield %

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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Give typing answer with explanation and conclusion The price of a newly issued 3-month T-bill with a face value of $1,000 is $992. A) What is the bond-equivalent yield? B) What is the discount yield?
An insurance company must make payments to a customer of $10 million in one year and $5 million in five years. The yield curve is flat at 10%. Required: a. If it wants to fully fund and immunize its obligation to this customer with a single issue of a zero-coupon bond, what maturity bond must it purchase? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. b. What must be the face value and market value of that zero-coupon bond? Note: Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places. a. Maturity of zero coupon bond b. Face value b. Market value years million million
Please help me to solve this problem
What is the discount yleld, bond equivalent yield, and effective annual retum on a $1 million T-bill that currently sells at 99.375 percent of ts lace value and is 65 days from maturity? (Use 360 deys for discount yield and 365 days in a yenr for bond equivalent yield and effective annunl return. De not round intermedinte calculetions. Round your answers to 3 decimal places. (e.g., 32.161) Dscount ykd Elond equivalont yld Efictive annual retum
In this problem we are going to calculate bond prices and returns Suppose that the yield on a 3 year note is 2.5%. a) Calculate the price of the 3 year note (face value = $1000) with three annual coupon payments (after year 1, after year 2, after year 3) of $30, i.e., the coupon rate is 3.0%. b) Is this note selling at a discount or premium? Explain. Suppose that after one year and after you receive one coupon payment, you decide to sell your note. Your note is now a two year note with one coupon payment after 1 year and another after year 2. Consider the following two scenarios: Scenario #1 - interest rates on what is now a two year note (i.e., your note) have fallen to 1.00% Scenario #2 - interest rates on what is now a two year note (i.e., your note) have risen to 4% c) given scenan d) Calculate the price that you can sell your note for under scenario #1 and the associated rate of return when you sell your note Calculate the price that you can sell your note for under scenario #2…
a: What is the bond equivalent yield on a Treasury-bill with a face value of $3,000000, a discount rateof 3% and 40 days until maturity? b: What does VAR(95%) of $32,000 mean? c: Use the following to calculate the effective borrowing cost of commercial paper• Face value = 19,000,000• Discount rate = 0.5%• Dealer Fee = 0.2%• Commitment Fee = 0.17%• Days to maturity = 50
Suppose that you buy a two-year 7.3% bond at its face value. a-1. What will be your total nominal return over the two years if inflation is 2.3% in the first year and 4.3% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Nominal return a-2. What will be your real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Real return % % Real return Nominal return b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) 1%
Below are two T-Bill purchases: A T-Bill with a face value of $900,000 and current market price of $850,000. The maturity date is in 250 days. A T-bill has a face value of $600,000, a current market price of $570,000 and matures in 200 days. Please calculate for both T-bill purchases based on the following: (a) What is the bank discount yield? Calculate the holding period yield Calculate the Effective Annual Yield Calculate the Money Market Yield (b)Explain why the Effective Annual Yield is greater than the Bank Discount Yield
An insurance company must make payments to a customer of $10 million in one year and $4 million in five years. The yield curve is flat at 10%. a. If it wants to fully fund and immunize its obligation to this customer with a single issue of a zero-coupon bond, what maturity bond must it purchase? (Do not round intermediate calculations. Round your answer to 4 decimal places.) Maturity of zero coupon bond b. What must be the face value and market value of that zero-coupon bond? (Do not round intermediate calculations. Enter your answers in millions rounded to 2 decimal places.) Face value Market value years million million
Suppose that you buy a two-year 8.9% bond at its face value. a-1. What will be your total nominal return over the two years if inflation is 3.9% in the first year and 5.9% in the second? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) a-2. What will be your total real return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. Now suppose that the bond is a TIPS. What will be your total 2-year real and nominal returns? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Assume that you conduct a relative value trade and close it out after 5 days. Your 5-day return is 0.84%. Annualize this return as a Bond Equivalent Yield (BEY). Assume that a year has 365 days. State your answer as a percent, but without the percent sign. So, for example, if your answer was 0.1053, which is 10.53%, you would answer 10.53.

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