The Land and Agricultural Bank of South Africa issues a Land Bank bill with a nominal value of R 2 000 000, it has a tenure of 92 days and it is issued at a discount rate of 12.00% . Then, 49 days later (i.e. 43 days before the expiry), the original investor trades the instrument at a discount rate of 10.80%. What would the buyer in the primary market's annual yield be if the instrument was held to maturity?

The Land and Agricultural Bank of South Africa issues a Land Bank bill with a nominal value of R 2 000 000, it has a tenure of 92 days and it is issued at a discount rate of 12.00% . Then, 49 days later (i.e. 43 days before the expiry), the original investor trades the instrument at a discount rate of 10.80%. What would the buyer in the primary market's annual yield be if the instrument was held to maturity?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 2P

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