FIN301: Financial Insituitions, Instruments ands Markets

The US Government wanted to auction $600 million worth of 1-year Treasury Bills. Bids for $100 million worth of Treasury Bills were submitted on a non- competitive basis.

Institution	Amount Bidded	Yield
Bank 1	$50 m	2.25%
Bank 2	$50 m	2.00%
Bank 3	$50 m	2.00%
Bank 4	$150 m	1.75%
Bank 5	$50 m	1.50%
Bank 6	$100 m	1.25%
Bank 7	$150 m	1.00%

Based on the bids submitted, use a table, to determine:

1. the stop-out yield that all successful bidders will receive for the Treasury Bills they bid, and

2. the amount of Treasury Bills allocated to Bank 2

(8 marks)