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6. You are investing $10K in treasury bills and are trying to choose between 13-week (3 month) bills yielding 2.370% (annualized) and 26-week (6 month)

6. You are investing $10K in treasury bills and are trying to choose between 13-week (3 month) bills yielding 2.370% (annualized) and 26-week (6 month) bills yielding 2.475%. You have the opinion that interest rates are rising and therefore hesitate to invest fully in 26-week bills. (A similar question could apply to bank CD rates). a. What is the price of the 26-week bill ($100 par value)? b. Assuming you can purchase fractional bills (which you cannot) what is your profit in part a.? c. What is the price of the 13-week bill ($100 par value)? How much will you have to re-invest at the end of its term if you fully invest your cash in 13-week bills? Again, assume you can purchase fractional bills. d. Which interest rate (annualized remember) does the new 13-week bill need to be 13 weeks from now for you to match the gain you would have received if you had just invested in the 26-week bills?

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