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Treasury Bill and Interest Rates

Assume a $ 1,000 treasury bill is quoted to pay 5% interest over a 6 month period.
? (a) How much interest would the investor receive?
? (b) What will be the price of the Treasury bill?
? (c) What will be the effective yield?

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treasury bill
Assume a $ 1,000 treasury bill is quoted to pay 5% interest over a 6 month period.
? (a) How much interest would the investor receive?

$1,000 x 5% x 180/360 = $25
? (b) What will be the price of the ...

Solution Summary

This solution is comprised of a detailed explanation to answer how much interest would the investor receive, what will be the price of the Treasury bill, and what will be the effective yield.

$2.19