Quantitative-Problems-Chapter-9 MATH 114

Quantitative Problems Chapter 9 1. What would be your annualized yield on the purchase of a 182­day Treasury­Bill for $4,925 that pays $5,000 at maturity? Solution: $5,000 $4,925 365 3.05% $4,925 182 i     2. What is the annualized yield on a Treasury bill that you purchase for $9,940 and will mature in 91 days for $10,000? Solution: 2.42% 3. If you want to earn an annualized yield of 3.5%, what is the most you can pay for a 91­day TreasuryBill $5,000 at maturity? Solution: $5,000 365 3.50% 91 P P    P  $4,956.74 4. What is the annualized yield on a Treasury bill that you purchase for $9,900 that will mature in 91 days for $10,000? Solution: 4.05% 5. The price of 182­day commercial paper is $7,840. If the annualized yield is 4.04%, what will the paper pay at maturity? Solution: $F $7,840 365 4.04% $7,840 182    P  $7997.93