An Investor Buys a T-Bill with 180 Days to Maturity

question 11

Multiple Choice

An investor buys a T-bill with 180 days to maturity and $250,000 par value for $242,000. He plans to sell it after 60 days, and forecasts a selling price of $247,000 at that time. What is the annualized yield based on this expectation?

• A)about 10.1 percent
• B)about 12.6 percent
• C)about 11.4 percent
• D)about 13.5 percent
• E)about 14.3 percent

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Definitions:

Subliminal Stimulation

A sensory or psychological input that is below an individual's threshold for conscious perception, yet can influence thoughts or actions.

Sensory Receptors

Sensory receptors are specialized cells or nerve endings that respond to changes in the environment by sending signals to the central nervous system, enabling perception.

Bottom-up Processing

An approach to information processing that starts with the sensory input and builds up to the final representation in the brain.

Absolute Threshold

The minimum stimulus energy needed to detect a particular stimulus 50 percent of the time.