Solution-Effective annual rate of return for the bill

Effective annual rate of return for the bill

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Reference no: EM132531535

Q.1 (a) A treasury bill with 120 days until maturity has an;

a) a bid discount rat of 14 percent.

b) asked discount rat of 13.25 percent and

c) assume 360 days in a year.

Required:

1) Determine the asked price for the T-bill.

2) Determine the bid price for the T-bill.

3) Calculate asked yield to maturity.

4) Determine the effective annual rate of return for the bill.

What is the bid-asked spread ?

Reference no: EM132531535

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Effective annual rate of return for the bill

Reference no: EM132531535

Reference no: EM132531535

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