i. Assume that newly issued three-month T-bills with a par value of $10,000 sold for $9,700....

 

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i. Assume that newly issued three-month T-bills with a par value of $10,000 sold for $9,700. What is the annualized yield of this three-month T-bills? ii. Assume that a three-month commercial paper with a face value of $1,000,000 is sold for $940,000. What is the annualized yield of this commercial paper? iii. Assume that Canada is in a strong economic condition, and you expect the economy to continuously grow over the next six months. Given your expectations and your calculation for the yield of the three-month T-bills and the three-month commercial paper, would you prefer to hold T-bills, or the commercial paper in your investment portfolio? i. Assume that newly issued three-month T-bills with a par value of $10,000 sold for $9,700. What is the annualized yield of this three-month T-bills? ii. Assume that a three-month commercial paper with a face value of $1,000,000 is sold for $940,000. What is the annualized yield of this commercial paper? iii. Assume that Canada is in a strong economic condition, and you expect the economy to continuously grow over the next six months. Given your expectations and your calculation for the yield of the three-month T-bills and the three-month commercial paper, would you prefer to hold T-bills, or the commercial paper in your investment portfolio?

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Treasury bills are defined as the bill which shows the lending of the money to the government and th... View the full answer