Question: Question 5 Your supervisor has asked you to do the following calculations: (a) A bank bill with 180 days to maturity is issued with a

Question 5

Your supervisor has asked you to do the following calculations:

(a) A bank bill with 180 days to maturity is issued with a yield of 0.15% pa. Face value is $1,000,000. Calculate the issue price of the bill.

(b) The bill in part (a) is sold after 60 days at a yield of 0.25% pa. Calculate and explain the nominal annual holding period yield.

(Accurate to the nearest dollar and rates as a percentage accurate to one basis point)

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