A Three-Month Treasury Bill Sold for a Price of $99

question 67

Multiple Choice

A three-month treasury bill sold for a price of $99.311998 per $100 face value.The yield to maturity of this bond expressed as an EAR is closest to:

• A)2.5%.
• B)2.8%.
• C)3.2%.
• D)4.0%.

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Definitions:

Deposited

The act of placing money into a financial account or institution for safekeeping or to earn interest.

Cheques

Non-cash forms of payment that order a bank to pay a specific amount of money from a person's account to another individual or company's account.

Lockbox System

A service offered by banks to companies for the collection of payments from customers, utilizing a special post office box to speed up the deposit of checks.

Daily Savings

The act of setting aside a portion of one's income or resources each day for future use, aiming for financial security or meeting specific goals.