A Bill with 90 Days to Maturity Initially Has a Yield

question 18

Multiple Choice

A bill with 90 days to maturity initially has a yield of 8% p.a.and a face value of $100 000.This bill is held for 45 days and sold as a 45-day bill at a yield of 6%.What is the continuously compounding holding period rate of returns over the 45 days?

• A) \( 0.97 \% \)
• B) \( 1.22 \% \)
• C) \( 1.76 \% \)
• D) \( 3.00 \% \)

---

Definitions:

Investment

The allocation of resources, usually financial, to assets or projects expected to generate future profits or benefits.

Exxon-Mobil

An American multinational oil and gas corporation that was formed by the merger of Exxon and Mobil in 1999, one of the largest publicly traded oil and gas companies by market capitalization.

Oil Rigs

Structures used for drilling wells to extract oil and gas from underground reservoirs.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, making them part owners of the company.