Question: We all know that three month Treasury bill rate could be used as risk free rate. Image that the Treasury just issued a three month
We all know that three month Treasury bill rate could be used as risk free rate. Image that the Treasury just issued a three month Treasury bill, which is going to mature in the next three months. The yield of this T-bill is 0.2% annually. How much will you pay for this T-bill? (hint: three month = 0.25 year, so use 0.25 for nper. No coupon paid for T-bill. Par=1000. Calculate for price). $999.50 $998.30 $997.50 $996.30
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
