Question

1a. If a $9,000 face T-bill has a 3.75 percent asking quote and a 90-day maturity, what is the price of the T-bill to the nearest dollar? Please show your work.

b. What happens to the price as the asking quote increases to 4 percent?

Please explain the relationship between asking quote and the price of the T-bill:

2)A $1 million jumbo CD is paying a quoted 2.55 percent interest rate on 150-day maturity CDs. How much money will you have at maturity if you invest in the CD? Please show your work:

Answer 1

All the answers are given in the pictures above. All the relevant formulae are also mentioned and given step by step

1. (a) $8,915.625

(b) $8910.00

2. For $100 investment, return is $101.055

For $1 million investment, return is $1,010,547.02