Calculate the Price of a Bank Bill with 90 Days

question 10

Multiple Choice

Calculate the price of a bank bill with 90 days remaining to maturity,with face value of $100 000 and priced to yield 10% p.a.

• A)$90 909
• B)$97 594
• C)$96 656
• D)$98 424

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Definitions:

Standard Deviation

A statistical measure that quantifies the variability or dispersion of a set of data points or investment returns around the mean.

Utility Function

A mathematical representation of a consumer's preferences, used in economics to model choices made under uncertainty, to maximize satisfaction or utility.

Expected Utility

A concept in economics that calculates the utility expected from an investment, considering all possible outcomes.

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how spread out the values in a data set are.