A Portfolio Manager Plans to Buy Three-Month T-Bills with the Total

question 52

Multiple Choice

A portfolio manager plans to buy three-month T-bills with the total face value of $1,000,000 in one month. The current price for three-month T-bills is $988,520. What is the fair forward price if the current effective annual risk-free rate over one month is 4%?

• A) $950,500
• B) $985,236
• C) $988,520
• D) $991,815
• E) $1,028,061

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Definitions:

Organizing Movements

The process of coordinating physical actions or maneuvers in an orderly way.

Concussion

A type of traumatic brain injury caused by a blow to the head or body, provoking temporary neurological disruption.

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex behaviors including planning, and heavily implicated in human personality.

Temporal Lobe

A region of the cerebral cortex located beneath the temples, responsible for processing auditory information and encoding memory, as well as being involved in understanding language and emotional response.