# Rate and Your Annualized Investment Rate

Rate and Your Annualized Investment Rate on a Treasury bill

1. What are the annualized discount rate and your annualized investment rate on a Treasury bill that you purchase for \$9,940 that will mature in 91 days for \$10,000?
2. What are the annualized discount rate and your annualized investment rate on a Treasury bill that you purchase for \$9,940 that will mature in 91 days for \$10,000?
3. What are the annualized discount rate and your annualized investment rate on a Treasury bill that you purchase for \$9,940 that will mature in 91 days for \$10,000?
4. If you want to earn an annualized discount rate of 3.5%, what is the most you can pay for a 91-day Treasury bill that pays \$5,000 at maturity?
5. The price of 182-day commercial paper is \$7,840. If the annualized investment rate is 4.093%, what will the paper pay at maturity?
6. The annualized yield is 3% for 91-day commercial paper and 3.5% for 182-day commercial paper. What is the expected 91-day commercial paper rate 91 days from now?
7. In a Treasury auction of \$2.1 billion par value 91-day T-bills, the following bids were submitted:

Bidder         Bid Amount (\$ million) Price per \$100

1        600    99.4

2        750    99.01

3        1        99.25

4        1.5     99.36

5        500    99.39

If only these competitive bids are received, who will receive T-bills, in what quantity, and at what price?

1. If the Treasury also received \$750 million in non- competitive bids, who will receive T-bills, in what quantity, and at what price? (Refer to the table in problem 5.)
2. Up-to-date interest rates are available from the Federal Reserve at http://www.federalreserve.gov/ releases. Locate the current rate on the following securities:
3. Prime rate
4. Federal funds
5. Commercial paper (financial)
6. Certificates of deposit
7. Discount rate
8. One-month Eurodollar