Question
1a. The face value of the Treasury Bill is $1000 and it has 40 days to maturity. What is the price of this Treasury Bill
1a. The face value of the Treasury Bill is $1000 and it has 40 days to maturity. What is the price of this Treasury Bill if the discount rate is 3%?
$ 1,080 | ||
$ 1,463 | ||
$ 1300.32 | ||
$ 996.66 |
1b.
An inflation linked bond (floating rate bond) matures in 2 years and has and a face value of $1,000 and a coupon rate of 10%. Inflation rate over the first year is 1% and the inflation rate over the second year is 3%. What is the amount that the investor will receive at the end of the first (1st) year?
$100 | ||
$1100 | ||
$101 | ||
$1,111 |
1c.
Returning back to the question #2, remember that an inflation linked bond (floating-rate bond) matures in 2 years and has a face value of $1,000 and a coupon rate of 10%. Inflation rate over the first year is 1% and inflation rate over the second year is 3%. This time, what is the amount that the investors will receive at the end of the second (2nd) year?
$ 1,100 | ||
$ 104.03 | ||
$1,144.33 | ||
$ 1,166.99 |
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