You would like to purchase a Treasury bill that has a $10,000 face value and is 68 days trom maturity. The current price of the Treasury bill is $9,875. Calculate the discount yicld on this Treasury bill. Answer
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- A treasury bill (or bond) promises to pay R1 200 000 to the holder of the bill in a year’s time. Based on this information, which one of the following statements is correct? (a) If the holder pays R1 142 000 for the bill, the return on this treasury bill for a year will be 4.83%; (b) A return of 6% means that the holder will pay R1 135 000 for the treasury bill; (c) A return of 3% would imply a purchase price of R1 173 000; (d) If the holder pays R1 140 000 for the bill, the return for the year will be 5.3%.Suppose you purchase a T-bills that is 125 days from maturity for $9,765. The T-bills has a face value of $10,000.a. Calculate the T-bills’s quoted discount rate. b. Calculate the T-bills’s annualized rate.c. Who are the major issuers of and investors in money market securities?a: What is the bond equivalent yield on a Treasury-bill with a face value of $3,000000, a discount rateof 3% and 40 days until maturity? b: What does VAR(95%) of $32,000 mean? c: Use the following to calculate the effective borrowing cost of commercial paper• Face value = 19,000,000• Discount rate = 0.5%• Dealer Fee = 0.2%• Commitment Fee = 0.17%• Days to maturity = 50
- 1. Suppose that you purchase the T-bill maturing on September 15, 2020, for 9,991.362. The T-billmatures 122 days after the settlement date and has a face value of 10,000. The T-bill’s discountyield is _________.2. Based from the above information, the T-bill’s bond equivalent is __________. The EAR on the Tbill is ___________.3. The discount yield on the T-bill maturing on November 3, 2020 or 171 days from settlement dateis 0.328 percent. The price of the T-bill is ___________.4. The overnight fed funds rate was 0.41 percent. The conversion of the fed funds rate to a bondequivalent rate is ___________. The EAR on the fed funds is ___________.5. Assume that a bank enters a repurchase agreement in which it agrees to buy fed funds at a priceof 15,000,000 with the promise to sell these funds back at a price of P15,000,926.345 after 12days. The yield on this repo to the bank is ___________.6. An investor purchases a 45-day commercial paper with a par value of 500,000 for a price…Q1: Calculate the price, and BEY of a treasury bill that matures in 200 days, has a face value of $10,000, and is currently being quoted at a bank discount yield of 2.% Q2:A Treasury bill that settles on May 18, 2022, pays $100,000 on August 21, 2022. Assuming a discount rate of 3.87 percent, what are the price and bond equivalent yield? Use Excel to answer this question. Note: Round your price answer to 2 decimal places. Enter your yield answer as a percent rounded to 3 decimal places.
- A Treasury bill has a bid yield of 2.79 and an ask yield of 2.77. The bill matures in 175 days. Assume a face value of $1,000. (Note: You may need to review material from an earlier chapter for the relevant formula.) a. At what price could you sell the Treasury bill? (Do not round intermediate calculations. Round your answer to 3 decimal places.) b. What is the dollar spread for this bill? (Do not round intermediate calculations. Round your answer to 3 decimal places.)Suppose a bank enters a repurchase agreerment in which it agrees to sell Treasury securities to a correspondent bank at a price of $9.99,838 with the promise to buy them back at a price of $10.000,073. Calculate the yield on the repo if it has a 6-day maturity. (write your answer in percentage and round it to 2 decimal places)Give typing answer with explanation and conclusion The price of a newly issued 3-month T-bill with a face value of $1,000 is $992. A) What is the bond-equivalent yield? B) What is the discount yield?
- Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $14,800,000, with the promise to buy them back at a price of $15,000,000. Calculate the yield on the repo if it has a 36-day maturity. (Do not round intermediate calculations. Round your answers to 4 decimal places. (e.g., 32.1642))One-year Treasury bills currently earn 2.25 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 2.45 percent and that two years from now, 1-year Treasury bill rates will increase to 2.95 percent. The liquidity premium on 2-year securities is 0.05 percent and on 3-year securities is 0.15 percent. If the liquidity premium theory is correct, what should the current rate be on 3-year Treasury securities?What is the bond equivalent yield on a Treasury-bill with a face value of $3,000000, a discount rateof 3% and 40 days until maturity? What does VAR(95%) of $32,000 mean? Use the following to calculate the effective borrowing cost of commercial paper• Face value = 19,000,000• Discount rate = 0.5%• Dealer Fee = 0.2%• Commitment Fee = 0.17%• Days to maturity = 50