A 182-Day T-Bill with a Face Value of $25,000 Is

question 90

Multiple Choice

A 182-day T-Bill with a face value of $25,000 is purchased for $X by an investor who wishes to yield r = 3.50%.What is X?

• A)$24,558.29
• B)$24,564.24
• C)$24,565.33
• D)$24,571.18

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Definitions:

Semi-annually Return

The return on an investment calculated twice a year, showing the investment's performance over each six-month period.

Investment

The allocation of resources, such as capital, time, or effort, in hope of generating a gain or profit in the future.

Fat Tails

Refers to the occurrences of extreme movements in stock prices or higher than normal risks in investments, which lead to heavy tails in a probability distribution.

Kurtosis

Measure of the fatness of the tails of a probability distribution. Indicates probability of observing extreme high or low values.