A $100,000, 168-day Government of Canada Treasury bill was purchased on its date of issue to yield 2.1%.

a. What price did the investor pay?

b. Calculate the market value of the T-bill 85 days later if the rate of return then required by the market has

(i) Risen to 2.4%.

(ii) Remained at 2.1%.

(iii) Fallen to 1.8%.

c. Calculate the rate of return actually realized by the investor if the T-bill is sold at each of the three prices calculated in Part (b).