Fina 3386 CHAPTER 6 PROBLEMS - CHAPTER 6 PROBLEMS 1 T-Bill...

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CHAPTER 6 PROBLEMS 1. T-Bill Yield Assume an investor purchased a sixmonth T-bill with a $10,000 par value for $9,000 and sold it 90 days later for $9,100. What is the yield? 2. 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. 3. Commercial Paper Yield Assume an investor purchased six-month commercial paper with a face value of $1 million for $940,000. What is the yield? 4. Repurchase Agreement Stanford Corporation arranged a repurchase agreement in which it purchased securities for $4.9 million and will sell the securities back for $5 million in 40 days. What is the yield (or repo rate) to Stanford Corporation? 5. 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? 6. 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.
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7. Required Rate of Return A money market security that has a par value of $10,000 sells for
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