1. A 182-day, $1,000,000 Government of Canada treasury bill yields 3.99% per annum is sold to Investor A. Assume the correct answer is $980,000(use this figure). The Treasury Bill was sold 65 days after the initial transaction for $990,900 by Investor A to Investor B.

1. What is the dollar amount of interest earned by Investor A?

2. What is the effective % return on investment earned by Investor A?

3. Assuming Investor B holds the Treasury Bill until maturity, what dollar amount of interest did Investor B gain or lose?

4. What is the effective annual % return on investment earned/lost by Investor B?

5. If there is a material difference in the % rate of returns earned by Investor A and Investor B, explain why this has occurred?

6. For Bank of Canada:
   1. After all transactions are considered, what was the effective interest rate paid by the Bank of Canada which originally issued the T-Bill?

2. Why could Bank of Canadas effective rate it pays (expressed in % terms) be either higher or lower than the % rate of return earned by Investor A or Investor B.

3. If the initial price paid by Party A was $980,000 and Party A later sold the T-Bill to Investor B for 990,900, how much interest did Bank of Canada actually pay and to whom did it make the actual cash payment of interest to, Investor A or Investor B or both?