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FIN4063 UTulsa Financial Institutions And Markets Chapter 11 Homework

  • What are the annualized discount rate and your annualized investment rate on a Treasury bill that you purchase for $9,940 that will mature in 91 days for $10,000?
  • If you want to earn an annualized discount rate of 3.5%, what is the most you can pay for a 91-day Treasury bill that pays $5,000 at maturity?
  • The price of 182-day commercial paper is $7,840. If the annualized investment rate is 4.093%, what will the paper pay at maturity?
  • The annualized yield is 3% for 91-day commercial paper and 3.5% for 182-day commercial paper. What is the expected 91-day commercial paper rate 91 days from now?
  • In a Treasury auction of $2.1 billion par value 91-day T-bills, the following bids were submitted:
  • If the Treasury also received $750 million in non- competitive bids, who will receive T-bills, in what quantity, and at what price? (Refer to the table in problem 5.)
  • Up-to-date interest rates are available from the Federal Reserve at http://www.federalreserve.gov/ releases. Locate the current rate on the following securities:
    • Prime rate
    • Federal funds
    • Commercial paper (financial)
    • Certificates of deposit
    • Discount rate
    • One-month Eurodollar deposits

Bidder

Bid Amount ($ million)

Price per $100

1

600

99.4

2

750

99.01

3

1

99.25

4

1.5

99.36

5

500

99.39

If only these competitive bids are received, who will receive T-bills, in what quantity, and at what price?

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