At the beginning of December, the 3-month T-Bill futures for March is priced at 99 (actual price, not the annualized, discount basis price), the spot 3-month T-Bill is trading at 98.5, and there is a 6-month T-Bill futures for June selling for 98.01. The spot price for the 6-month T-bill is 97.515. If you can go long or short on any of these bonds (borrow or lend at any of these rates), show how you can make a profit.
At the beginning of December, the 3-month T-Bill futures for March is priced at 99 (actual price, not the annualized, discount basis price), the spot 3-month T-Bill is trading at 98.5, and there is a 6-month T-Bill futures for June selling for 98.01. The spot price for the 6-month T-bill is 97.515. If you can go long or short on any of these bonds (borrow or lend at any of these rates), show how you can make a profit.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...
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At the beginning of December, the 3-month T-Bill futures for March is priced at 99 (actual price, not the annualized, discount basis price), the spot 3-month T-Bill is trading at 98.5, and there is a 6-month T-Bill futures for June selling for 98.01. The spot price for the 6-month T-bill is 97.515. If you can go long or short on any of these bonds (borrow or lend at any of these rates), show how you can make a profit.
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