IvanRivera6-Financial.Markets.Project-Unit 4

IvanRivera6-Financial.Markets.Project-Unit 4 - Unit 4...

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MT481 Financial Markets Prof. Weaver Ivan Rivera Chapter 6, Problem 1-4 pg. 147 1. T-bill Yield Assume an investor purchased a six month T-bill with a $10,000 par value for $9,000 and sold it 90 days later for $9,100. What is the yield? For this problem we would have to bring the equation, which I think is Yield = Sale value – Purchase price divided by new purchase price x the days in the year for the time it took to sell the T-bill again so =9,100 – 9,000/ 9,000 x 365 /90 = 4.51% 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. This would be Discount = Par – Purchase price/ Par val. X 360/day = 10,000 – 9,700 / 10,000 x 360/90 =12% 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? Basically same concept as the first question
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IvanRivera6-Financial.Markets.Project-Unit 4 - Unit 4...

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