1.	The yield on 3-month T bill is 1%. The yield on 3-month commercial paper is 1.88%. Assume that investors get 60% of the face value when commercial paper defaults. What is the probability of default of the commercial paper?

2.

Bank of Canada offers $10 billion auction of 91 day T bills. It receives the following bids: $6 billion non-competitive and the following competitive bids $1 billion at 99.30 or yield 2.8275% $1 billion at 99.32 or yield 2.7461% $1 billion at 99.34 or yield 2.6648% $2 billion at 99.36 or yield 2.5836% What bids are accepted? What is the price paid for each accepted bids?