Question 2 A newly issued six-month T-bills with a par value of $100,000 sold for$98,900. Compute the T-bill discount. What is the Bond equivalent yield? What is the effective annual return?

Question 3 XYZ Corporation arranged a repurchase agreement in which it purchased securities for $10.9 million and will sell the securities back for $11.5 million in 65 days. What is the yield (or repo rate) to XYZ Corporation? What is the discount yield (or quoted yield)? What is the effective annual return?