A Treasury Bill with a Par Value of $100,000 Due

question 47

Multiple Choice

A Treasury bill with a par value of $100,000 due three months from now is selling today for $97,087,with an effective annual yield of _________.

• A) 12.40%
• B) 12.55%
• C) 12.62%
• D) 12.68%
• E) none of these

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Definitions:

Density Function

A mathematical function that describes the probability distribution of a continuous random variable, indicating how the total probability is distributed over the various possible values the variable can take.

Symmetric

A characteristic of shapes, equations, or other entities that remain unchanged when reflected, rotated, or transformed in specific ways.

Tails

The ends of a distribution curve, referring to the extreme values far from the mean in a probability distribution.

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the number of values.