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8.1 A T-bill that is traded in the bond market for $925, promises the face value of $1,000 upon its maturity in exactly 300 days.

8.1 A T-bill that is traded in the bond market for $925, promises the face value of $1,000 upon its maturity in exactly 300 days.

Use continuous compounding/discounting to Calculate the T-bill annual rate of return.

8.2 Consider a zero coupon bond with and annual rate of 5%. The bond matures in 25 years. Use periodic compounding/discounting to calculate the bonds market price.

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