If a 6-month T-Bill with a face value of $100 is purchased at a 8% annual discount, the buyer will receive $100 at maturity. The rate of return (annualized) of this T-Bill is 7.5% 15% 11.1% 13.5% 8.33% 14.6% 6.2% 5%

If a 6-month T-Bill with a face value of $100 is purchased at a 8% annual discount, the buyer will receive $100 at maturity. The rate of return (annualized) of this T-Bill is 7.5% 15% 11.1% 13.5% 8.33% 14.6% 6.2% 5%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 15P

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Question

If a 6-month T-Bill with a face value of $100 is purchased at a 8% annual discount, the

buyer will receive $100 at maturity. The rate of return (annualized) of this T-Bill is

		7.5%
		15%
		11.1%
		13.5%
		8.33%
		14.6%
		6.2%
		5%

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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