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T-bills You tract the market price of the T-bill on the first of each month during the year. Below is the data. Suppose you had
T-bills
You tract the market price of the T-bill on the first of each month during the year. Below is the data. Suppose you had sold the T-bill after 5 months on November 1, 2014 for $994.29.
Part a. What would you have earned monthly and annually? Answer in the green box below.
Part b. Suppose you sold it at maturity on Jun 1, 2015, what is the annual rate? Answer in the yellow box below.
Part c. Is this ex-ante or ex-post rate? Type it in here. please show formulas. thanks :)
THE PRICE OF TREASURY BILL \begin{tabular}{|r|r|} \hline Date & Bill Price \\ \hline 1-Jun-14 & 989.00 \\ \hline 1-Jul-14 & 989.49 \\ \hline 1-Aug-14 & 990.13 \\ \hline 1-Sep-14 & 991.46 \\ \hline 1-Oct-14 & 992.74 \\ \hline 1-Nov-14 & 994.29 \\ \hline 1-Dec-14 & 995.21 \\ \hline 1-Jan-15 & 995.74 \\ \hline 1-Feb-15 & 996.74 \\ \hline 1-Mar-15 & 997.97 \\ \hline 1-Apr-15 & 998.01 \\ \hline 1-May-15 & 999.38 \\ \hline 1-Jun-15 & 1000.00 \\ \hline \end{tabular} Part b. At Maturity Annualized returnStep by Step Solution
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