When the Australian government issues government bonds during a tender, the cumulative aggregate/total demand by bidders is the following: Yield 2.20% 2.15% 2.10% 2.05% 2.00% Total cumulative aggregate demand (in AUD million face value) 2,200 2,050 1,950 1,900 1,820 The Australian government is intending to sell AUD million 2,000 face value bonds using a variable discriminatory tender. The money of the issue will be paid on the Australian government account in the RBA, Australia's central bank.
When the Australian government issues government bonds during a tender, the cumulative aggregate/total demand by bidders is the following: Yield 2.20% 2.15% 2.10% 2.05% 2.00% Total cumulative aggregate demand (in AUD million face value) 2,200 2,050 1,950 1,900 1,820 The Australian government is intending to sell AUD million 2,000 face value bonds using a variable discriminatory tender. The money of the issue will be paid on the Australian government account in the RBA, Australia's central bank.
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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Transcribed Image Text:When the Australian government issues government bonds during a tender, the cumulative aggregate/total demand by
bidders is the following:
Yield
2.20%
2.15%
2.10%
2.05%
2.00%
Total cumulative aggregate demand (in AUD million face
value)
2,200
2,050
1,950
1,900
1,820
The Australian government is intending to sell AUD million 2,000 face value bonds using a variable discriminatory tender.
The money of the issue will be paid on the Australian government account in the RBA, Australia's central bank.
Transcribed Image Text:b. Determine the cut-off yield of the tender above. Explain in details the process you have followed to select the cut
off yield.
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