An investor buys a 180 day T-bill at a bank discount quote of 3.86. The investor's...
An investor buys a 180 day T-bill at a bank discount quote of 3.86. The investor's actual annual rate of return on this investment was ______.
22.00%
17.19%
3.99%
13.99%
Homework Answers
Actual annual rate of return on the investment = [100/price - 1] * 365 / maturity days
=[100/98.07 - 1] * 365 / 180
=[1.01968 -1] * 365 / 180
= 0.01968* 365 / 180
= 3.99%
Note:- Price of T-Bill = par value [1 - (discount rate * maturity days / 360)]
= $100 * [1 - (0.0386 * 180 / 360]
= $100 * [1 - 0.0193]
= 98.07
Add Answer to:
An investor buys a 180 day T-bill at a bank discount quote of 3.86. The investor's...
8. An investor buys a T-bill at a bank discount quote of 4.80 with 150 days...
8. An investor buys a T-bill at a bank discount quote of 4.80 with 150 days to maturity. The investor's bond equivalent yield on this investment is A. 4.8% B. 4.97% C. 5.47% D. 5.74%
An investor purchases one municipal bond and one corporate bond that pay rates of return of...
An investor purchases one municipal bond and one corporate bond that pay rates of return of 7% and 8.5%, respectively. If the investor is in the 20% tax bracket, his after-tax rates of return on the municipal and corporate bonds would be, respectively, _____. An investor buys a T-bill at a bank discount quote of 5.40 with 90 days to maturity. The investor's actual annual rate of return on this investment is _____. What is the tax exempt equivalent yield...
If a $10,000 par T-bill has a 4.25% discount quote and a 180-day maturity, what is...
If a $10,000 par T-bill has a 4.25% discount quote and a 180-day maturity, what is the price of the T-bill to the nearest dollar? Please show equations/work
A T-bill quote sheet has 60 day T-bill quotes with a 4 bid and a 3.88...
A T-bill quote sheet has 60 day T-bill quotes with a 4 bid and a 3.88 ask. If the bill has a $8,300 face value an investor could buy this bill for $8,246.33 $8,746.33 $8,310.21 $8,250.21
A T-bill quote sheet has 60-day T-bill quotes with a 5.25 bid and a 5.19 ask....
A T-bill quote sheet has 60-day T-bill quotes with a 5.25 bid and a 5.19 ask. If the bill has a $10,000 face value, an investor could buy this bill for _____.
a and b Peter buys a 180-day bank bill with a face value of $500 000...
a
and b
Peter buys a 180-day bank bill with a face value of $500 000 at a yield of 2.9% p.a. (simple interest). After 92 days he sells it at a yield of 3.2% p.a. (simple interest). a. [7 marks] Draw a fully labelled cash flow diagram (from Peter's per- spective) that describes Peter's purchase and sale of the bank bill. b. [3 marks) What is the value of yield (simple interest) that Peter earned on this transaction? Include...
An investor buys a T-bill with 180 days to maturity and $250,000 par value for $242,000....
An investor buys a T-bill with 180 days to maturity and $250,000 par value for $242,000. He plans to sell it after 60 days, and forecasts a selling price of $247,000 at that time. What is the annualized yield based on this expectation? 1) about 10.1 percent 2) about 12.6 percent 3) about 11.4 percent 4) about 13.5 percent 5) about 14.3 percent
14. If an investor buys a $50,000, 90-day T-bill for $49,2 annualized return on a simple...
14. If an investor buys a $50,000, 90-day T-bill for $49,2 annualized return on a simple (arithmetic) basis is: n l( 50 and holds i ill maturity,the 15. A newly issued T-bill with a $10,000 par value that sells for $9,850 maturity has a discount return of c. at a discount from par value d, only through a financial intermediary 16. Both T-bills and paper are a, with a stated coupon rate b at a premium above par value 17....
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...
TOPC. X51) If an investor buys a 39-week T-bill with a maturity value of $25,000 for...
TOPC. X51) If an investor buys a 39-week T-bill with a maturity value of $25,000 for $23,543 what annual interest rate (annual yield) will the investor earn? (Express your answer as a percentage, correct to one decimal place.) *52) An investment company pays 7% compounded quarterly. What is the effective rate? (Compute the answer to two decimal places). 53) How much should you invest now at 6% compounded semiannually to have $8,500 to bu a car in 2.5 years? ve...
8. An investor buys a T-bill at a bank discount quote of 4.80 with 150 days to maturity. The investor's bond equivalent yield on this investment is A. 4.8% B. 4.97% C. 5.47% D. 5.74%
a
and b
Peter buys a 180-day bank bill with a face value of $500 000 at a yield of 2.9% p.a. (simple interest). After 92 days he sells it at a yield of 3.2% p.a. (simple interest). a. [7 marks] Draw a fully labelled cash flow diagram (from Peter's per- spective) that describes Peter's purchase and sale of the bank bill. b. [3 marks) What is the value of yield (simple interest) that Peter earned on this transaction? Include...
14. If an investor buys a $50,000, 90-day T-bill for $49,2 annualized return on a simple (arithmetic) basis is: n l( 50 and holds i ill maturity,the 15. A newly issued T-bill with a $10,000 par value that sells for $9,850 maturity has a discount return of c. at a discount from par value d, only through a financial intermediary 16. Both T-bills and paper are a, with a stated coupon rate b at a premium above par value 17....
TOPC. X51) If an investor buys a 39-week T-bill with a maturity value of $25,000 for $23,543 what annual interest rate (annual yield) will the investor earn? (Express your answer as a percentage, correct to one decimal place.) *52) An investment company pays 7% compounded quarterly. What is the effective rate? (Compute the answer to two decimal places). 53) How much should you invest now at 6% compounded semiannually to have $8,500 to bu a car in 2.5 years? ve...
Most questions answered within 3 hours.
-
The x component of the velocity of an object vibrating
along the x-axis obeys the equation...
asked 21 minutes ago -
A junction box contains two trade size 2 raceways on the left
side, and two trade...
asked 54 minutes ago -
Atmospheric Mass
Venus and Earth have about the same mass and radius, but the
atmospheric pressure...
asked 1 hour ago -
5. Discuss the use of fault tree analysis (FTA) for risk
assessment (maximum one paragraph).
asked 2 hours ago -
Given that a sample of aluminium oxide has a Young's modulus of
393 GPa and a...
asked 4 hours ago -
At a certain temperature, the equilibrium constant, Kc, for this
reaction is 53.3.
H2(g)+I2(g)−⇀↽−2HI(g)Kc=53.3
At this...
asked 5 hours ago -
Question1 ) The STL provides similiar classes called stack and
queue, both of which gave functions...
asked 6 hours ago -
For Questions 1-4, assume you have 5 bits available:
1. For (positive) integers: What is the...
asked 6 hours ago -
convert grams into vloume with the density of water being at
.997514 g/cm^3 at 23.1 Celsuis...
asked 8 hours ago -
Foreman company obtained a $20,000, 6% loan on May 1, 2018.
Principal and interest will be...
asked 8 hours ago -
5. Problem 11.05 (Discounted Payback)
eBook
Project L costs $60,000, its expected cash inflows are $14,000
per...
asked 9 hours ago -
1. Which of the following is true about politics and health
organizations?
A. Health organizations are...
asked 9 hours ago