Problem 3.8.Discount rate andinvestment rateber 16,Nepal Rastra Bank accepted a bid of 98.2 on a Treasury bill issue. What discountrate would be published on this Treasury bill? What is the annual interest rate onthis bill that would make it comparable to rates quoted on bonds? Now supposethat after 10 days of T-bills issued, the discount rate increased to 11.5 percent. Atwhat price will the Treasury bill be selling when it has 50 days remaining tomaturity?10.000

A treasury bill is a type of fixed income issued by the central government that sells at a price…

rate would be publishe on this Treasury bill? What is the annual interest rate of this bill that would make it comparable to rates quoted on bonds? Now suppose that after 10 days of T-bills issued, the discount rate increased to 11.5 percent. At what price will the Treasury bill be selling when it has 50 days remaining to maturity?

rate would be publishe on this Treasury bill? What is the annual interest rate of this bill that would make it comparable to rates quoted on bonds? Now suppose that after 10 days of T-bills issued, the discount rate increased to 11.5 percent. At what price will the Treasury bill be selling when it has 50 days remaining to maturity?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 20PROB

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