Consider two T-bills with 90 days of maturity (360 days in a year). The US T-bill has a price quote of 98.75. The Singapore (SG) T-bill has an annualized rate of 3.51%.
 

(a) Compute the actual discount rate of the US T-bill and the price of the SG T-bill and determine which of the instrument is cheaper. 

 

Consider a bond with a par value of $5,000 and an annual coupon rate of 5.15%. Coupons are paid quarterly and the quoted price 23 days away from the next coupon date is 101.12. 

 

(b) Compute the clean price of the bond and determine whether the bond is at a discount. (8 marks)

Answer rating: 100% (QA)

a Computing the actual discount rate of the US Tbill Actual discount rate Par value ... View the full answer