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?

6. 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.)
7. 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:
8. Prime rate
9. Federal funds
10. Commercial paper (financial)
11. Certificates of deposit
12. Discount rate
13. One-month Eurodollar

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