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?
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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. 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?
3. 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?
4. 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?
5. In a Treasury auction of $2.1 billion par value 91-day T-bills, the following bids were submitted:
If only these competitive bids are received, who will receive T-bills, in what quantity, and at what
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:
a. Prime rate
b. Federal funds
c. Commercial paper (financial)
d. Certificates of deposit
e. Discount rate
One-month Eurodollar deposits
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