Matt Redburn has decided to invest $1,000 and purchase 52-week T-bills with some excess cash he doesn’t need for the next year. He knows that T-bills are discounted securities, but he is confused about the purchase price and current yield and asks for your help.

1. If the T-bill has a stated interest rate of 0.40 percent, what is the purchase price?

2. What is the current yield for the T-bill?