Extra Problems 2b

Extra Problems 2b - (c) An insurance company buys a $10...

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ACTSC 231 Extra Problems 2b 1. You are given the following information about US treasury bills days to mat. bid ask 6 4.96 4.88 13 3.84 3.76 20 3.87 3.79 27 3.84 3.76 34 3.81 3.77 41 3.82 3.78 48 3.87 3.83 (a) How much would a dealer o/er to pay for a $1,000,000 13 day T-bill? (b) A bank owns a $5 million 48-day T-bill and would like to trade it for a 34-day T-bill. What is the net amount the bank will receive from (or pay to) the dealer for this trade?
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Unformatted text preview: (c) An insurance company buys a $10 million 41-day T-bill. How much interest will the insurance company earn on this investment? What nominal rate of interest compounded every 41 days did the insurance company earn? 2. A loan of $600 is to be repaid by payments of X at the end of each year for 4 years. Find X if & t = : 06 1 & : 02 t ; & t & 4 . 1...
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