The Federal Reserve announces an offering of Treasury bills with a face value of $60 billion. Noncompetitive

Question:

The Federal Reserve announces an offering of Treasury bills with a face value of $60 billion. Noncompetitive bids are made for $8 billion, along with the following competitive bids:

Bidder Price Bid Quantity Bid

A ................. $9,400 ................... $15 billion

B ................... 9,405 .................... 14 billion

C ................... 9,410 .................... 11 billion

D ................... 9,415 ..................... 8 billion

E ................... 9,425 .................... 10 billion

F .................. 9,430 ....................... 9 billion

In a single-price auction, which bids are accepted and what prices are paid by each bidder? How much money is raised by the entire offering?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...