Q1 A U.S. investor obtains Ghana cedis when the cedi is worth $.33 and invests in a one-year money market security that provides a yield (in cedis) of 24%. At the end of one year, the investor converts the proceeds from the investment back to dollars at the prevailing spot rate of $.26. What is the effective yield earned by this foreign investor? Q2 You have just been offered a commercial paper with a face value of $45,000,000 and a purchase price of $40,000,000 which matures in 182 days. What is the discount yield on this commercial paper? Q3 Ecobank holds a $450million T-Bill but is in short of cash. It needs cash to meet the requirement of a customer who has come to withdraw $400million. You have been asked to approach Barclays Bank to sell the T-Bill for $395.5million on Monday morning with an agreement to repurchase the bill on Friday evening. What is the Repo Rate on this transaction?
Q1 A U.S. investor obtains Ghana cedis when the cedi is worth $.33 and invests in a one-year
Q2 You have just been offered a commercial paper with a face value of $45,000,000 and a purchase price of $40,000,000 which matures in 182 days. What is the discount yield on this commercial paper?
Q3 Ecobank holds a $450million T-Bill but is in short of cash. It needs cash to meet the requirement of a customer who has come to withdraw $400million. You have been asked to approach Barclays Bank to sell the T-Bill for $395.5million on Monday morning with an agreement to repurchase the bill on Friday evening.
What is the Repo Rate on this transaction?
Step by step
Solved in 5 steps