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:

Candidate's Success

The achievement of a political candidate in securing a position or office as a result of an election.

Framers

The delegates who attended the 1787 Constitutional Convention and contributed to the drafting and creation of the United States Constitution.

Directly

In a straightforward or unmediated manner; without any intermediary.

Electoral College

A body established by the U.S. Constitution to elect the President and Vice President, comprising electors from each state who vote based on the popular vote in their state.