Question

(B) The “bid” and “ask” yields for a 100- day US Treasury Bill were quoted by...

(B) The “bid” and “ask” yields for a 100- day US Treasury Bill were quoted by a bond dealer as 5.91% and 5.89%, respectively. The face value of this US Treasury Bill is $100,000. Shouldn’t the “bid yield” be less than the “ask yield”, because the “bid yield” indicates how much the dealer is willing to pay and the “ask yield” is what the dealer is willing to sell the Treasury bill for? Please explain your view on this with an illustration of calculation.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
a. A Treasury issue is quoted at 103.88545 bid and 103.935 ask. Assume a face value...
a. A Treasury issue is quoted at 103.88545 bid and 103.935 ask. Assume a face value of $1,000. What is the least you could pay to acquire a bond? Price b. A Treasury bond with the longest maturity (30 years) has an ask price quoted at 104.4375. The coupon rate is 3.60 percent, paid semiannually. What is the yield to maturity of this bond? yield to maturity: %
A U.S. Treasury Bill with 92 days to maturity is quoted at a discount yield of...
A U.S. Treasury Bill with 92 days to maturity is quoted at a discount yield of 2.37%. a) Assuming a $100,000 face value, what dollar price would you pay for this bill? b) What holding period yield will you earn? c) What is the effective annual yield? d) What is the bond equivalent yield?
(1.) a) Suppose that the bank discount yield on a 71-day Treasury bill is 4.86%. What...
(1.) a) Suppose that the bank discount yield on a 71-day Treasury bill is 4.86%. What is the bond equivalent yield on the T-bill? Assume that the face value of the T-bill is $10,00 b) Suppose that your are hired as an investment analyst with an insurance company. On MarketAxess (a ?xed income trading platform), you notice that a bond dealer is quoting a 180-day Treasury bill at a 3.75 bid and 3.60 ask. At price could the T-bill be...
1. A 270-day Treasury bill (assume a $1000 par value) is quoted as having a price...
1. A 270-day Treasury bill (assume a $1000 par value) is quoted as having a price of $978.62. What is its bond equivalent yield? Record your final numerical answers as a percent rounded to 3 decimal places. 2. A 180-day Treasury bill is quoted as having a 3.875% bond equivalent yield. What is the effective annual yield? Record your final numerical answers as a percent rounded to 3 decimal places.
BBB -rated corporate bond has a yield to, maturity of 8.5%.US treasury security has a yield...
BBB -rated corporate bond has a yield to, maturity of 8.5%.US treasury security has a yield to maturity of 7.0%. These yields are quoted as APR with semiannual compounding, Both pay semiannual coupons of 7.3% and hhave five years to maturity. a. What is the price (expressed as a percentage of the face value) of the treasury bond? b. What is the price (expressed as a percentage of the face value) of the BBB rated corporate bond? c.What is the...
A) Luke-Warm Investments is buying a 120 day original term to maturity bank bill today. The...
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...
2a)US Treasury Bonds are quoted according to Select one: A. its yield to maturity. B. its...
2a)US Treasury Bonds are quoted according to Select one: A. its yield to maturity. B. its yield to call. C. discount yield. D. a percentage of dollar price. b) Which of the following is not an example of an embedded option? Select one: A. Sinking fund provision B. Warrant C. Call provision D. Conversion provision c)The Put premium on a Putable Bond is Select one: A. the amount an issuer must pay above par value when putting (or selling) its...
You work in the treasury department of a manufacturing company and have been tasked to prepare...
You work in the treasury department of a manufacturing company and have been tasked to prepare a short-term financial plan for the coming year. The projected sales forecasts for the next five quarters are, respectively, $210m, $180m, $245m, $280m, and $240m. The firm sells on credit and takes, on average, 30 days to collect from its customers; $68m in receivables are currently outstanding. Also, the firm orders a quarter in advance on credit—purchases in a given quarter is 60% of...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
Actually a HISTORY question: what tactics does Einhard use to portray Charlemagne in "Life of Charlemagne"...
Actually a HISTORY question: what tactics does Einhard use to portray Charlemagne in "Life of Charlemagne" and what tactics does Procipius use to describe Justinian in a positive light in the "Nika Riots"? Ive posted both excerpts. "Life of Charlemagne" Charles the Great, (Charlemagne in French) reigned 768-814 as king of the Franks and the most important ruler of the Carolingian Dynasty, conquering lands in what is now Germany, France, Spain, and Italy. On Christmas Day 800 C.E., Pope Leo...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT