One year ago you bought a $10,000, 4-year Government of Canada Treasury Bill (discount bond) at the then market yield of 5%. Today the market yield on the bond is 3% and now you find that must sell the bill. (a ) What is the current market price of the bill? (b ) What is your one period holding period return on your investment?
One year ago you bought a $10,000, 4-year Government of Canada Treasury Bill (discount bond) at the then market yield of 5%. Today the market yield on the bond is 3% and now you find that must sell the bill. (a ) What is the current market price of the bill? (b ) What is your one period holding period return on your investment?
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 4P
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One year ago you bought a $10,000, 4-year Government of Canada Treasury Bill (discount bond) at the then market yield of 5%. Today the market yield on the bond is 3% and now you find that must sell the bill.
(a ) What is the current market price of the bill?
(b ) What is your one period holding period return on your investment?
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