Question
In 3 months an investor plans to invest $10 million in 90-day Treasury bills. The current 90-day Treasury bill rate is 5.50%. If the Treasury
In 3 months an investor plans to invest $10 million in 90-day Treasury bills. The current 90-day Treasury bill rate is 5.50%. If the Treasury bill rate falls to 5.20% in 3 months, what is the approximate gain (loss) for the investor?
Group of answer choices The investor gains $7,000 because of the 30 basis point decline in interest rates The investor loses $7,000 because of the 30 basis point decline in interest rates The investor loses $30,000 because of the 30 basis point decline in interest rates The investor gains $30,000 because of the 30 basis point decline in interest rates The investor loses $3,000 because of the 30 basis point decline in interest rates
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started