Question

The Treasury auctioned $2.5 billion par value 91-day T-bills, the following bids were received: Bidder Bid Amount Bid Price $500 million $0.9940 $750 million $0.9901 $1.5 billion $0.9925 $1 billion $0.9936 $600 million $0.9939 The Treasury also received $2 billion in noncompetitive bids. Who will receive T-bills and what quantity? от дом A noncompetitive bidders receive $2 billion and bidder I receives $500 million B. noncompetitive bidders receive $1.9 billion and bidder I receives S600 million C. bidder I receive $500 million and bidder 5 receive $600 million, bidder 4 receives S1 billion, noncompetitive bidders receive $400 million Dinone of the above

Answer 1

Option A i.e noncompetitive bidder receive $2 billion and bidder 1 receives $ 500 million.

This is because the bid given by non competitive bidder is best since there is no competitor who is giving better bid then him .

So out of $ 2.5 billion $ 2 billion given to non competitor bidder and balance will be given to next best bidder i.e Bidder 1