1. You are having a discussion on short-term securities with your grandpa. Your grandpa states that Since bank bills are instruments that typically have a maximum maturity of 180 days, they are of no use in meeting funding requirements for longer than 180 days. Critically analyse and discuss this statement.
2. The company ALTA Ltd issued a bank accepted bill to fund its working capital requirement. The bill is issued for 60 days, with a face value of $150,000 and a yield of 2.5% per annum to the original discounter. After 25 days, the bank bill is sold by the original discounter into the secondary market for $138,222. The purchaser holds the bill to maturity. What is the yield received by the holder of the bill at the date of maturity?
3. The Atony Ltd. company raised $1.5m through a 10-year bond issue on the 31^st of December 2020. The bond pays 3.4% per annum in coupons, with coupons paid quarterly. Calculate the price of the bond on the 12^th of August 2025, given a market yield of 4.5% per annum. In your answer, identify whether the bond is trading at a discount or a premium, and explain the logic as to why this is the case. Note: You can write down the calculations by hand and attach a photo of your answer in the answer sheet.