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Home Q & A Board Science-Related Homework Help Mathematics
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Hillier Hillier
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Posts: 550
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6 years ago
Average rate of return or yield on 180-day Government of Canada treasury bills sold on June 18, 2013 was 1.04%. The client sold the $50 000 T-bill after 39 days. What rate of return (per annum) did the client realize while holding the T-bill, if the short term interest for this maturity had risen to 1.13% by the date of sale?
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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wrote...
#1
6 years ago
Present value of $50,000 discounted at 1.04% for 180 days =   
= $49 744.87
Days remaining to maturity = 180-39 = 141 days
Selling price =   = $49 782.69
Effective interest on initial investment = $49 782.69 - $49 744.87 = $37.82
Rate of return =   =   = 0.00712 = 0.712%
Hillier Author
wrote...
#2
5 years ago
Helpful!
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