The dealer forecasts that two days from now the discount rate on an 88-day bill will...
The dealer forecasts that two days from now the discount rate on an 88-day bill will be 5.10%. The current discount rate on a 90-day bill is 5.10%. What is the highest two-day repo rate the dealer can afford to pay and still expect to break even? Explain
Homework Answers
Add Answer to:
The dealer forecasts that two days from now the discount rate on an 88-day bill will...
The spot discount rates for two T-bills, 80-day T-bill and 170-day T-bill, are given below. A)...
The spot discount rates for two T-bills, 80-day T-bill and 170-day T-bill, are given below. A) Based on the two T-bills's discount rates, what should be the quoted equilibrium price of an 80-day T-bill futures contract? Assume $1,000,000 face value. Keep in mind the quoted price is 100 - (discount rate). What should be the dollar amount implied by the futures quoted price (the amount to pay or to be paid at settlement)? B) You took 10 long T-bill futures...
8) 8. If you pay $975 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? А. 10.8990 B. 10.28% C. 9.89% D. 10.14% 8. If you pay $975 for a 91-day T-bill. It is wor...
8)
8. If you pay $975 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? А. 10.8990 B. 10.28% C. 9.89% D. 10.14%
8. If you pay $975 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? А. 10.8990 B. 10.28% C. 9.89% D. 10.14%
17 marks QUESTION 1 a. Julie purchased a 180-day $100 000 bank bill 74 days ago...
17 marks QUESTION 1 a. Julie purchased a 180-day $100 000 bank bill 74 days ago for $98 300.00. She sold it to Tony today and received $99 000.00 (i) [2 marks] Draw a cash flow diagram that captures the details of Julie's transactions (ii [3 marks] Calculate the purchase yield (simple interest rate) and sale yield (simple interest rate) of this bill (as a percentage, rounded to 2 decimal places) (ii [2 marks] Without any further calculations, explain how...
A firm will need to take out a $2,464,701 loan 270 days from now for a...
A firm will need to take out a $2,464,701 loan 270 days from now for a 90-day interval. It purchases a call with X=5.8%. The call expires in 270 days and the underlying is a 90-day corporate loan rate. What will be the call payoff in 360 days, if the 90-day spot rate in 270 days is 5.6%? Round your answer to the nearest integer.
Luke purchased a 180-day $500, 000 bank bill on 1 January 2019 at a yield rate of 3.18% p.a. (simple interest rate). He sold this bank bill on 15 April 2019 at a yield rate of 3.06% p.a. (simple interest rate).
a) [3 marks] Draw a carefully labelled cash flow diagram to represent the above financial transaction. Draw your cash flow diagram from Luke’s perspective.b) [4 marks] Calculate the purchase price of the 180-day bank bill on 1 January 2019 (rounded to three decimal places) and the sale price of the 180-day bank bill on 15 April 2019 (rounded to three decimal places).c) [2 marks] Calculate Luke’s holding period yield (expressed as a percentage and rounded to two decimal places).d) [4 marks]...
5. Pulling it all together: The discount rate on a 30-day T-Bill is 0.25%. The stock...
5. Pulling it all together: The discount rate on a 30-day T-Bill is 0.25%. The stock market is expected to earn 10% during the coming year. A company with a ß of 1.5 has two sources of capital: $750,000 in long-term debt, for which it pays an after-tax cost of 4%, and $1,250,000 in equity. What is the company's WACC? (Stumped? There are hints below- but don't peek unless you must!)
Bill Blank signed an $7,540 note at Citizen's Bank. Citizen's charges a 8.2% discount rate. Assume...
Bill Blank signed an $7,540 note at Citizen's Bank. Citizen's charges a 8.2% discount rate. Assume the loan is for 270 days. a. Find the proceeds. (Use 360 days a year. Round your intermediate calculations and final answer to the nearest cent.) Proceeds b. Find the effective rate charged by the bank. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest tenth percent.) Effective rate You were offered the opportunity to purchase either...
The current one-year T-bill rate is .48 percent and the expected one-year rate 12 months from...
The current one-year T-bill rate is .48 percent and the expected one-year rate 12 months from now is .90 percent. According to the unbiased expectations theory, what should be the current rate for a two-year Treasury security? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) what is the current rate?
Two individuals, Susan and Bill, are involved in a bitter dispute over splitting a small prize...
Two individuals, Susan and Bill, are involved in a bitter dispute over splitting a small prize of £1000. The prize donator, who acts as an independent arbitrator, rules that if an agreement cannot be reached between the two individuals within two months then they will each receive one third of the prize with the remainder going to charity. They are allowed two chances to settle: Susan can make an offer to Bill immediately which he can either accept or reject....
4. You can purchase a T-bill that is 90 days from maturity for $9,900. The T-bill...
4. You can purchase a T-bill that is 90 days from maturity for $9,900. The T-bill has a face value of $10,000. Calculate the T-bill's EAR. A) 4.00 percent. B) 4.16 percent. C)4.10 percent. D) 4.07 percent. E) 4.21 percent 5. A $5 million jumbo CD is paying a quoted 4.25% interest rate on 120-day maturity CDs. How much money could you withdraw at maturity if you invest in the CD? A) $5,000,000 B) $5,069,863 C) $4,929,167 D) $5,212,500 E)...
8)
8. If you pay $975 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? А. 10.8990 B. 10.28% C. 9.89% D. 10.14%
8. If you pay $975 for a 91-day T-bill. It is worth $1,000 at maturity. What is the discount rate? А. 10.8990 B. 10.28% C. 9.89% D. 10.14%
17 marks QUESTION 1 a. Julie purchased a 180-day $100 000 bank bill 74 days ago for $98 300.00. She sold it to Tony today and received $99 000.00 (i) [2 marks] Draw a cash flow diagram that captures the details of Julie's transactions (ii [3 marks] Calculate the purchase yield (simple interest rate) and sale yield (simple interest rate) of this bill (as a percentage, rounded to 2 decimal places) (ii [2 marks] Without any further calculations, explain how...
5. Pulling it all together: The discount rate on a 30-day T-Bill is 0.25%. The stock market is expected to earn 10% during the coming year. A company with a ß of 1.5 has two sources of capital: $750,000 in long-term debt, for which it pays an after-tax cost of 4%, and $1,250,000 in equity. What is the company's WACC? (Stumped? There are hints below- but don't peek unless you must!)
Bill Blank signed an $7,540 note at Citizen's Bank. Citizen's charges a 8.2% discount rate. Assume the loan is for 270 days. a. Find the proceeds. (Use 360 days a year. Round your intermediate calculations and final answer to the nearest cent.) Proceeds b. Find the effective rate charged by the bank. (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest tenth percent.) Effective rate You were offered the opportunity to purchase either...
Two individuals, Susan and Bill, are involved in a bitter dispute over splitting a small prize of £1000. The prize donator, who acts as an independent arbitrator, rules that if an agreement cannot be reached between the two individuals within two months then they will each receive one third of the prize with the remainder going to charity. They are allowed two chances to settle: Susan can make an offer to Bill immediately which he can either accept or reject....
4. You can purchase a T-bill that is 90 days from maturity for $9,900. The T-bill has a face value of $10,000. Calculate the T-bill's EAR. A) 4.00 percent. B) 4.16 percent. C)4.10 percent. D) 4.07 percent. E) 4.21 percent 5. A $5 million jumbo CD is paying a quoted 4.25% interest rate on 120-day maturity CDs. How much money could you withdraw at maturity if you invest in the CD? A) $5,000,000 B) $5,069,863 C) $4,929,167 D) $5,212,500 E)...
Most questions answered within 3 hours.
-
You have conducted an experiment to try to demonstrate that
growth factor receptor X protein (GFRX)...
asked 7 minutes ago -
The Gross Profit ratio for 2014 is 57.07%
Assume that Campbell's net sales for the first...
asked 7 minutes ago -
Thoroughly discuss the various current and proposed solutions to
anthropogenic influences resulting in Global Climate Change....
asked 11 minutes ago -
BLOG EXERCISE: You are writing a weekly intranet blog for the
CEO of a large Canadian...
asked 14 minutes ago -
calculate ΔGrxn at 36 ∘C. N2O4(g)→2NO2(g)
asked 14 minutes ago -
Present and Future Values of Single Cash Flows for Different
Periods
Find the following values, using...
asked 17 minutes ago -
Which types of mutations in DNA can lead to the translation of a
non-functional protein product?...
asked 16 minutes ago -
Many structures are composed of individual elements that react
in unison when forces are applied. the...
asked 18 minutes ago -
Work of 1950 J is done by stirring a perfectly insulated beaker
containing 75 g of...
asked 47 minutes ago -
The neighborhood kids set up an outdoor lemonade stand in
Maryland in June. They find that...
asked 49 minutes ago -
9. A company has a beginning inventory of 4,000 units. The
company estimates it will sell...
asked 1 hour ago -
A patient goes to the doctor's office with symptoms of a urinary
tract infection and provides...
asked 1 hour ago