Question

An Australian company issued a 30-day bank-accepted bill domestically with a face value of $200000. The bill was discounted at a yield of 7.22% per annum, representing a price of $198820.15. After 21 days the discounter sells the bill in the short-term money market for $199582.19. The bill is not traded again in the market.

Calculate the yield to the original discounter AND the yield to the current holder at maturity,

Select one:

a. Yield to original discounter is 6.66%; Yield to current holder is 8.49%

b. Yield to original discounter is -1.80%; Yield to current holder is 8.49%

c. Yield to original discounter is -1.80%; Yield to current holder is 28.30%

d. Yield to original discounter is 7.22%; Yield to current holder is 28.30%

e. Yield to original discounter is 6.66%; Yield to current holder is 28.30%

f. Yield to original discounter is 7.22%; Yield to current holder is 8.49%

Answer #1

A company issues a bank-accepted bill to fund a short-term
business project. The bill is issued for 180 days, with a face
value of $1,750,000 and a yield of 9.25% per annum. What amount
will the company raise to fund the project?
After 110 days, the bank bill is sold by the original discounter
into the secondary market for $1,700,350. The purchaser holds the
bill to maturity. What is the yield received by:
the original discounter of the bill?
the...

You buy a 180-day bank-accepted bill (BAB)with a face value of
$100,000 at the yield of 6.50 per cent per annum.
a)What price would you pay for the bill now?
After 32 days,you sell the bank bill for $95,500.00.
b)What is your holding period yield?
Part 2
Examine two reasons why an investor may prefer bonds rather than
shares when deciding to invest.

Chris' Fish'n'Chips will issue 90 day Bank Accepted Bills (BABs)
with a face value of $150,000. The acceptance fee charged by the
bank is 2%. If the market rate for 90 day BABs is 10.01% how much
will Chris' Fish'n'Chips receive from the issue?
A $100,000 Bond was issued at 5.16% pa.
The market is currently returning 5.11% pa.
Calculate the Coupon Payment to the nearest dollar.
Assuming a 13 year Bond, paying semi annual coupons was issued 6
years...

On 31 August 2018, SisterCo issued a 180-day bank bill with a
face value of $100,000 at a yield of 5.5% p.a. The bill was
accepted and discounted by BankOne on that date. BankOne held the
bill for 97 days and then sold it to BankTwo at a yield of 5.9%
p.a. How much did BankOne receive when it sold the bill to BankTwo?
Round your answer the whole dollar
A.
$95,897
B.
$98,989
C.
$97,676
D.
$98,676
E.
$96,783...

A) Luke-Warm Investments is buying a 120 day original term to
maturity bank bill today. The bill matures in 100 days’ time. The
bill has a face value of $500,000 and the current yield on this
bill is 3%. Note that this is a quoted annual interest rate. How
much will Luke-Warm Investments have to pay to buy the bill?
B) After 60 days of holding the bill, Luke-Warm Investments wants
to sell the bill on the secondary market. At...

On 1 April 2020, the AOFM issued seven-year Government
fixed-interest bonds with a face value of $25 million, paying
half-yearly coupons at 6.50 per cent per annum. Coupons are payable
on 31 March and 30 September each year until maturity.
On 15 September 2022, the holder of the bonds sells at a current
yield of 6.75 per cent per annum. You are required to
calculate:
n (number of periods)
i (current yield)
C (coupon payment)
k (fraction of elapsed interest period...

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