A Holder of a 180-Day Bill with 60 Days Left

question 56

Multiple Choice

A holder of a 180-day bill with 60 days left to maturity and a face value of $100 000 chooses to sell it into the market.If 60-day bills are currently yielding 6.8% per annum,what price will be obtained?

• A) $81 728.61
• B) $89 945.79
• C) $97 813.27
• D) $98 894.55

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Definitions:

Economies of Scope

Cost advantages that enterprises obtain due to the efficient production of a wide range of products rather than specializing in a single product or service.

Joint Cost Function

A concept in economics where certain costs are incurred to produce multiple products simultaneously, making it challenging to allocate the costs distinctly to each product.

Economies of Scope

Cost advantages that enterprises obtain through the variety of products rather than through a high volume of a single product.

Cost Function

A mathematical relationship describing how production costs change with changes in the quantity of output produced.