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The Canadian Government is intending on making a large cash investment in June and July of 2023. As a consequence, the government will have a

The Canadian Government is intending on making a large cash investment in June and July of 2023. As a consequence, the government will have a short-term shortfall of $6.2 million between cash receipts and expenditures.

  1. The government is intending to meet this shortfall by issuing 90-day Treasury Notes today. Calculate the face value of this issue, given a yield of 2.2% per annum.

b. Explain how increased government bond issuance can result in a decrease of corporate bond issuance and lower corporate bond prices.

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