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Lenny, who is an active trader, buys a Treasury note with the following characteristics: Face Value: $1,000, Maturity: 90 days.

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Lenny, who is an active trader, buys a Treasury note with the following characteristics: Face Value: $1,000, Maturity: 90 days. Yield: 3.57% per annum. After holding the Treasury note for 60 days, Lenny sells it to another trader for $996. a) What amount will Lenny pay for the T-note? 


b) What is the annual rate of return (HPY, Holding Period Yield) for Lenny? [4 marks] c) What is the current Yield to Maturity (YTM) for this security? [4 marks] Note: Show all your workings for each part.

Expert Answer:

Answer rating: 100% (QA)

a To calculate the amount Lenny paid for the Treasury note we need to find the present value of the View the full answer


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Related Book For  answer-question
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance

ISBN: 978-0077861704

11th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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Posted Date: June 09, 2023 02:12:24
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