Chen buys a T-bill with a face value of $10,000.00 on 2021-05-12 that matures on 2021-10-29. The annual simple interest rate is 1.875%, and the daycount convention is ACT/365. What price P does he pay? a. P = $9,917.76. b. P = $9,874.47. c. P = $9,913.43. d. P = $9,883.13. e. P = $9,909.10.

Chen buys a T-bill with a face value of $10,000.00 on 2021-05-12 that matures on 2021-10-29. The annual simple interest rate is 1.875%, and the daycount convention is ACT/365. What price P does he pay? a. P = $9,917.76. b. P = $9,874.47. c. P = $9,913.43. d. P = $9,883.13. e. P = $9,909.10.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 14E

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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.

Question

P = $9,917.76.

P = $9,874.47.

P = $9,913.43.

P = $9,883.13.

P = $9,909.10.

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