1. The following figure shows a partial listing of Treasury bill rates on 09 May 2016. The first column reports the date to maturity for each Treasury bill; the second column reports numbers of remaining days to maturity, the third and fourth columns report the bid yield and asked yield; the fifth column reports the change percentage of the yields on 09 May 2016 compared with that on yesterday. The par value of each T-bill is $10,000. (40 Marks) MATURITY DAYS TO MAT BID Yield (%) ASKED Yield (%) 14-Jul-2016 54 0.162 0.142 01-Sep-2016 115 0.263 0.246 27-Oct-2016 171 0.372 0.357 08-Dec-2016 220 0.343 0.330 27-Apr-2017 353 0.612 0.568 CHG (%) 0.002 0.001 0.001 0.005 0.003 (a) Based on the Bank Discount Method, how much price the investor needs to pay to buy the bill maturing on 08-Dec-2016 from the dealer? (b) Based on the Bank Discount Method, how much price the investor can sell the bill maturing on 14-Jul-2016 to the dealer? (c) What is the asked yield of the bill maturing on 27-Apr-2017 at the specific date of 08-May-2016? 1. The following figure shows a partial listing of Treasury bill rates on 09 May 2016. The first column reports the date to maturity for each Treasury bill; the second column reports numbers of remaining days to maturity, the third and fourth columns report the bid yield and asked yield; the fifth column reports the change percentage of the yields on 09 May 2016 compared with that on yesterday. The par value of each T-bill is $10,000. (40 Marks) MATURITY DAYS TO MAT BID Yield (%) ASKED Yield (%) 14-Jul-2016 54 0.162 0.142 01-Sep-2016 115 0.263 0.246 27-Oct-2016 171 0.372 0.357 08-Dec-2016 220 0.343 0.330 27-Apr-2017 353 0.612 0.568 CHG (%) 0.002 0.001 0.001 0.005 0.003 (a) Based on the Bank Discount Method, how much price the investor needs to pay to buy the bill maturing on 08-Dec-2016 from the dealer? (b) Based on the Bank Discount Method, how much price the investor can sell the bill maturing on 14-Jul-2016 to the dealer? (c) What is the asked yield of the bill maturing on 27-Apr-2017 at the specific date of 08-May-2016
