Matt Redburn has decided to invest $1,000 and purchase 52-week Tbills with some excess cash he doesnt

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Matt Redburn has decided to invest $1,000 and purchase 52-week Tbills 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.

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

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

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Personal Finance

ISBN: 9781260799736

13th Edition

Authors: Jack Kapoor

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