Question
What is the initial price of a 182-day, $200,000 Government of Canada T-bill that yields 4.04% per annum b. Assume the Treasury Bill in the
- What is the initial price of a 182-day, $200,000 Government of Canada T-bill that yields 4.04% per annum
b. Assume the Treasury Bill in the question above was bought by Investor 1. Investor 1 then sold the T-Bill 30 days after issuance for $196,000 to Investor 2. Assume the answer to question a. was $197,000.
c What is the effective interest rate paid by the initial issuer of the T-bill (ie the borrower)?
d. What is the dollar amount of interest earned or lost for the two investors, Investor 1 and Investor 2?
e. What is the effective annual percentage rate of return earned or lost by Investor1?
f. What is the effective annual percentage rate of return earned or lost by Investor 2?
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Introduction To Managerial Accounting Hc 2002 Text Only
Authors: Folk
1st Edition
0071123350, 978-0071123358
