Question
The Treasury plans to issue $100 million of 52-day Treasury Bills using a Dutch auction system. They received $55 million in non-competitive bids. They also
The Treasury plans to issue $100 million of 52-day Treasury Bills using a Dutch auction system. | |||||||||||||
They received $55 million in non-competitive bids. | |||||||||||||
They also received the following competitive bids: | |||||||||||||
Broker-dealer A bids $40,000,000 at 11.70% | |||||||||||||
Broker-dealer B bids $14,000,000 at 11.50% | |||||||||||||
Broker-dealer C bids $18,000,000 at 10.80% | |||||||||||||
Broker-dealer D bids $15,000,000 at 10.50% | |||||||||||||
Broker-dealer E bids $18,000,000 at 9.90% | |||||||||||||
Broker-dealer F bids $17,000,000 at 9.60% | |||||||||||||
At what rate will the auction clear and what amounts do each broker-dealer receive? |
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
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