Question: Not sure how to go about completing these problems as the calculations are difficult to understand. Any feedback would be amazing! Problem 1 (1.8 point):
Not sure how to go about completing these problems as the calculations are difficult to understand. Any feedback would be amazing!
Problem 1 (1.8 point): Go to the Bureau of Public Debt website at www.treasurydirect.gov, click on "Auction results", then select "2018".Find the Treasury Auction Competitive Results for the 13-week T-bills auctioned on December 24, 2018.
Answer the following questions:
1.Insert the auction results page into your project. (0.2 pts.)
2.What are the high, low, and median yields on this issue? (0.2 pts.)
High: 2.415%
Median: 2.380%
Low: 2.320%
3.What is the "stop-out" rate? (0.2 pt.)
4.What is the total dollar value each of tendered bids and accepted bids? Include FIMA. (0.2 pt.)
5.What is the total dollar value each of noncompetitive bids and competitive bids accepted? Include FIMA (0.2 pt.)
6.What is the bid-to-cover ratio? Include FIMA.(0.2 pts.) (Round to 2 decimal places)
7.What is the price investors paid for $1,000 face value of these T-bills?Show how this was calculated? (0.2 pts.) (Round to 5 decimal places)
8.What is the Yield to maturity (or bond equivalent yield) on the issue?Show how this was calculated. (0.2 pts.) (Round to 3 decimal places)
9. Assume the yield to maturity immediately increases a full 1 percent.Calculate the new price. (0.2 pts.) (Round to 3 decimal places)
Problem 2 (2.2 pts.): Go to the Bureau of Public Debt website at www.treasurydirect.gov. click on "Auction results", then select "2019". Find the Treasury Auction Competitive Results for the 10-year T-Notes auctioned November 6, 2019.
Answer the following questions:
1.Insert the auction results page into your project. (0.2 pts.)
2.What are the high, low, and median yields on this issue? (0.2 pts.)
3.What is the "stop-out" rate? (0.2 pts.)
4.What is the total dollar value each of tendered bids and accepted bids? Exclude SOMA (0.2 pt.)
5.What is the total dollar value each of noncompetitive bids and competitive bids accepted? (0.2 pt.)
6.What is the bid-to-cover ratio? (0.2 pts.) (Round to 2 decimal places)
7.What is the coupon rate offered on this issue? (0.2 pts.)
8.What is the price investors paid for $1,000 face value of these T-notes?Show how this was calculated? (0.2 pts.) (Round to 4 decimal places)
9.Complete the following chart in Excel, showing the relationship between market interest rates and prices for the 10-year T-Note in Problem 2. (0.2 pts.) (Hint: use the function of PV; T-notes are semi-annual bonds)
10-yr T-note
rm
Price
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
10.make graph/chart showing the 10-year T-note's values at varying market rates of interest.(0.2 pts.) Your graph should look professional with appropriate titles and labels.
11. In a short paragraph, what can you say about the relationship between price and interest rates? (0.2 pts.)
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