Sean Purchased a 182-Day, $10 000 T-Bill on Its Issue

question 34

Essay

Sean purchased a 182-day, $10 000 T-bill on its issue date for $9754.25. What was the original yield of the T-bill?

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Definitions:

Interest Rates

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Price Mechanism

The system by which the forces of supply and demand determine the prices of goods and services.

Usury Laws

Regulations governing the maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.

Usury Law

Legislation that sets the maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.