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

question 7

Multiple Choice

A Treasury bill with a par value of $100,000 due one month from now is selling today for $99,010.The effective annual yield is

• A)12.40%.
• B)12.55%.
• C)12.62%.
• D)12.68%.
• E)None of the options

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Definitions:

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business.

Undisclosed Principal

A person who is represented in a transaction by an agent but whose identity is not revealed to the third party involved.

Agent's Authority

Refers to the powers granted to an agent by the principal, enabling the agent to act on behalf of the principal in legal or business matters.

Apparent Authority

A situation where a reasonable third party would understand that an agent had the authority to act, even if the agent did not have such authority.