Lydia Purchased a $100,000 150-Day T-Bill When the Prevailing Yield

question 137

Short Answer

Lydia purchased a $100,000 150-day T-bill when the prevailing yield on T-bills was 4.5%. She sold the T-bill 60 days later when the prevailing yield was 4.2%. What interest rate did Lydia earn during the 60-day period? (Taken from CIFP course materials.)

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Definitions:

TAT

Thematic Apperception Test, a projective psychological test in which respondents express their thoughts and feelings through stories they create about ambiguous pictures.

Computerized Axial Tomography

A medical imaging technique that uses X-rays to create detailed cross-sectional images of the body, commonly known as a CAT scan.

Electroencephalography

A non-invasive procedure that records electrical activity of the brain using sensors placed on the scalp.

Magnetic Resonance Imaging

A medical imaging technique used in radiology to form pictures of the anatomy and the physiological processes of the body in both health and disease.