Asked by Rodessa Rivera on May 13, 2024
Verified
Jake purchased a $100,000 182-day T-bill discounted to yield 5.5%. When he sold it 30 days later, yields had dropped to 5.0% simple interest. How much did Jake earn? (Taken from CIFP course materials.)
T-Bill
Treasury Bill, a short-term government security issued at a discount from the face value and pays no interest before it matures.
Yields
The income return on an investment, such as the interest or dividends received, usually expressed as an annual percentage.
- Calculate and review the returns from investments over assorted spans, particularly in T-bills and commercial paper.
- Acquire knowledge on the consequences that variations in interest rates have on the profitability of liquidating investments before their due dates.
Verified Answer
SS
Learning Objectives
- Calculate and review the returns from investments over assorted spans, particularly in T-bills and commercial paper.
- Acquire knowledge on the consequences that variations in interest rates have on the profitability of liquidating investments before their due dates.
Related questions
The Purchaser of a 168-Day T-Bill with a Face Value ...
The Purchaser of a 168-Day T-Bill with a Face Value ...
A $100,000, 91-Day Province of Ontario T-Bill Was Purchased for ...
Sixty-Day Commercial Paper with Face Value $100,000 Was Issued by ...
Calculate and Compare the Issue Date Prices of $100,000 Face ...