On January 1st, the One Star Capital pension fund bought 1,000 US T-Bills that each had a $1,000 par value. One Star held them for exactly 150 days until they matured.

If they paid $993.79 for each T-Bill, what was the implied annualized % rate of return for this investment? (assume a 360-day year)

To finance the purchase of the T-Bills, One Star borrows $1,000,000 each day on the "Repo" market, placing the T-Bills as collateral. Assuming a constant 0.50% annualized rate for the one-day "repo" rate, how much interest (in dollars and cents) does One Star have to pay each day to its counterparty? (assume a 360-day year)

Answer rating: 100% (QA)

To calculate ... View the full answer