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1. A. You purchase a 1-year discount Treasury note for $98.52. If the Face Value is $100, calculate the yield on this note? (3 points)

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1. A. You purchase a 1-year discount Treasury note for $98.52. If the Face Value is $100, calculate the yield on this note? (3 points) B. The demand for 1-year Treasury notes has decreased, causing the price to decline to $98.04. Calculate the new yield (3 points). 2. A. The US Treasury issues a 2-year discount note today that promises to pay $110.25 at maturity (this is the Face Value, F). If the current interest rate is 5%, calculate today's price for this discount note. [This is a simple PV equation with n=2] B. The next day, conflict breaks out in Ukrainia and demand for the note increases, pushing its price up to $103.92. Calculate the new Yield to Maturity (i) on this discount note (2). [Given P, F in part A), and n, you are solving for i]

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