A three-month (90 day) Treasury bill with a $10,000 face value is quoted at a discount...

Question

Question

A three-month (90 day) Treasury bill with a $10,000 face value is quoted at a discount of 0.60.
1. What is the implied price of the Treasury bill?
2. What is the implied rate of return that an investor can earn over the 90-day period?

business finance

Answer 1

Answer #1

a)	Implied price = 10000*(1-0.60%) =	$ 9,940
b)	Implied rate of return = 10000/9940-1 =	0.6036%

Answer 2

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