Suppose on February 13, 2021, the Canadian Treasury department announced the issue of $525 billion Treasury...
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Suppose on February 13, 2021, the Canadian Treasury department announced the issue of $525 billion Treasury securities through the auction market with February 27, 2021 as the closing date. On February 27, 2021, the following categories of bidders were identified and classified by the yield quote. Categories of bids Quoted yield (%) Non-competitive bid A Competitive bid B Competitive bid C Competitive bid D Competitive bid E Competitive bid F Competitive bid G Competitive bid H Total amount bid (billions) $50 $75 $125 $150 $175 $95 $80 $30 NA 2.15 2.25 2.30 2.45 2.50 2.60 2.75 1. Identify the winners and losers under the Dutch auction process. 2. What is the high yield? Discuss its significance under the single-price auction process. 3. Suppose you find your bid in category E with 2.45% yield quote and $25 billi on bid. What happens? 4. What is the bid-to-cover ratio? Discuss its relevance to the auction market. Suppose on February 13, 2021, the Canadian Treasury department announced the issue of $525 billion Treasury securities through the auction market with February 27, 2021 as the closing date. On February 27, 2021, the following categories of bidders were identified and classified by the yield quote. Categories of bids Quoted yield (%) Non-competitive bid A Competitive bid B Competitive bid C Competitive bid D Competitive bid E Competitive bid F Competitive bid G Competitive bid H Total amount bid (billions) $50 $75 $125 $150 $175 $95 $80 $30 NA 2.15 2.25 2.30 2.45 2.50 2.60 2.75 1. Identify the winners and losers under the Dutch auction process. 2. What is the high yield? Discuss its significance under the single-price auction process. 3. Suppose you find your bid in category E with 2.45% yield quote and $25 billi on bid. What happens? 4. What is the bid-to-cover ratio? Discuss its relevance to the auction market.
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1 In a Dutch auction process the lowest yield bids are accepted first until the total amount of secu... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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