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Consider the Data of a 6 Month US Treasury Bill that you bought from the Tap 6 Month US Treasury Bills Buying Price (Investment) Issue
Consider the Data of a 6 Month US Treasury Bill that you bought from the Tap 6 Month US Treasury Bills Buying Price (Investment) Issue Date 31-05-20 9,000 Maturity Date 31-11-20 10,000 Maturity Value 6 months 6 months Annual Yield 1,000 Return 11.11% Yield 22.22% By 30-6-20 the Interest Rates change dramatically and come down to 15% per annum. If at this time you need cash ar in sell the bond in the Secondary Market, what price can you expect to sell it for? Annual Yield =15% Annual Return Investment = =15% 10002 Investment =Investment 2000 15% 13,333.33 =Investment Requiredi Calculate Expected Sale Proceeds if After 1 Month Market Interest Rate is ??? A. = B. = C. = 30% 22% 7% ??? ??? D. Explain what is the relationship between T-Bill Prices and Market Interest Rates
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