Westpac arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill when it is first issued at a yield of 4.55% pa and sell it 30 days later to Prudential Investments at a yield of 4.95% pa. What price does Prudential Investments buy the bill for? a. $496,288.04 b. $476,417.34 c. $500,000.00 d. $497,974.00 e. $495,964.34
Westpac arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill when it is first issued at a yield of 4.55% pa and sell it 30 days later to Prudential Investments at a yield of 4.95% pa. What price does Prudential Investments buy the bill for? a. $496,288.04 b. $476,417.34 c. $500,000.00 d. $497,974.00 e. $495,964.34
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 22P
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Westpac arranges financing for Super Duper Pty Ltd with a 90 day bank bill with a Face Value of $500,000. City Investments buy the bill when it is first issued at a yield of 4.55% pa and sell it 30 days later to Prudential Investments at a yield of 4.95% pa. What price does Prudential Investments buy the bill for?
a. $496,288.04
b. $476,417.34
c. $500,000.00
d. $497,974.00
e. $495,964.34
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