Given the following information on a Treasury auction for a 91-day T-bill issue:

Volume of T-bills requested by Treasury = $15B

Total volume of T-bills bids submitted = $16.5B

Volume of noncompetitive T-bill bids submitted = $2B

Volume of competitive T-bills bids submitted = $14B, broken down as follows:

Questions:

a. What is the auction’s stop price?

b. How many bids (in dollars) are accepted above the stop price?

c. What proportion of their request do bids at the stop price receive?

d. What is the weighted average bid that the noncompetitive bidders receive?

e. What is the tail?

Transcribed Image Text:

Bid Yield Bid Price Quantity of Bid (in Billions) 2.750 99.3049 0.4 2.755 99.3036 0.5 2.760 99.3023 0.8 2.765 99.3011 1.3 2.770 99.2998 1.4. 2.775 99.2985 1.5 2.800 99.2922 1.6 2.825 99.2859 1.7 2.830 99.2846 1.4 2.835 99.2834 1.3 2.840 99.2821 1.6 2.845 99.2808 0.5 2.850 99.2796 0.5 Total 14.5