help please Problem 3 Intro You've collected some information about a Treasury bill: Maturity Days to...

Question

Question

help please
Problem 3 Intro Youve collected some information about a Treasury bill: Maturity Days to maturity Bid Ask Face value 3/10 13

Answer 1

Answer #1

solution:

1.Price to buy the bond pay for T-bill is;

Bid*Face value = 1.85*$10,000 =$18,500

2.State municipal bonds are tax free but corporate bonds are taxable,hence required yield on state municipal bond must be;

Yield on municipal bond=yield on corporate bond (1-tax rate)

=2.4%(1-0.29) =1.704%

Answer 2

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