A $25,000, 91-Day Province of Newfoundland Treasury Bill Was Originally

question 9

Short Answer

A $25,000, 91-day Province of Newfoundland Treasury bill was originally purchased at a price that would yield the investor a 5.438% rate of return if the T-bill is held until maturity. Thirty-four days later, the investor sold the T-bill through his broker for $24,775.
a) What price did the original investor pay for the T-bill?
b) What rate of return will the second investor realize if she holds the T-bill until maturity?
c) What rate of return did the first investor realize during his holding period?

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