The current discount rate, assuming a 360 day year, on a 90-day bill is 3.5 percent. The face value is ZAR1 million.
(i) What is the price of the bill?
(ii) If the discount rate increases by one basis point to 3.51 percent, what is the change in the price of the bill?
(iii) If the discount rate decreases by one basis point to 3.49 percent, what is the change in the price of the bill?

Answer rating: 100% (QA)

To calculate the price of the bill you can use the formula for discounting The price of a bill is eq... View the full answer