Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

show complete workings and final answer! A student attempted the following question but unfortunately made a few mistakes in his/her work. A 180 day Commercial

show complete workings and final answer!
image text in transcribed
A student attempted the following question but unfortunately made a few mistakes in his/her work. A 180 day Commercial Bill with a Face Value of $100,000 was traded in the market 90 days after it was first issued. Current rates are 90 days at 3%pa 120 days at 3.5%%pa 180 days at 4%pa What price was the bill traded at? The student's attempt: The price of the bill is 100,000 PV = 1 98532.93 (10 (1+3) Your task: 1) Identify what mistakes did the student made in the above calculation 2) What should have been the correct answer here (No working/equation is required)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Management

Authors: James Van Horne, John Wachowicz

13th Revised Edition

978-0273713630, 273713639

More Books

Students also viewed these Finance questions