Answered: a 3 month $4,000 treasury bill with…

a 3 month $4,000 treasury bill with discount rate 8.281 was sold in 2009. a. find the price of the t bill . round to nearest dollar b. what is the actual intrest rate paid by the treasury

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 21P

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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.

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a 3 month $4,000 treasury bill with discount rate 8.281 was sold in 2009.

a. find the price of the t bill . round to nearest dollar

b. what is the actual intrest rate paid by the treasury

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