Reference no: EM132890223

Problem 1. T-bill Yield. The Treasury is selling 91-day T-bills with a face value of $10,000 for $9,900. If the investor holds them until maturity, calculate the yield.

Problem 2. T-bill Yield. You paid $98,000 for a $100,000 T-bill maturing in 120 days. If you hold it until maturity, what is the T-bill yield? What is the T-bill discount?

Problem 3. Return on NCDs. Phil purchased an NCD a year ago in the secondary market for $980,000. The NCD matures today at a price of $1,000,000, and Phil received $45,000 in interest. What is Phil's return on the NCD?
4. Repurchase Agreement. Stanford Corporation arranged a repurchase agreement in which it purchased securities for
$4,900,000 and will sell the securities back for $5,000,000 in 40 days. What is the yield (or repo rate) to Stanford Corporation?

Problem 5. Commercial Paper Yield. Assume an investor purchased six-month commercial paper with a face value of $1,000,000 for $940,000. What is the yield?

Problem 6. T-bill Discount. Newly issued three-month T-bills with a par value of $10,000 sold for $9,700. Compute the T-bill discount.

Problem 7. Required Rate of Return. A money market security that has a par value of $10,000 sells for $8,816.60. Given that the security has a maturity of two years, what is the investor's required rate of return?

Problem 8. T-bill Yield. Assume an investor purchased a six-month T-bill with a $10,000 par value for $9,000 and sold it ninety days later for $9,100. What is the yield?