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##### 1. if a six-month treasury bill is purchased for $...

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1. if a six-month treasury bill is purchased for $0.9675 on a dollar(i.e.,96,750 for a $100,000 bill), what is the discounted yield and the annual rate of interest? what will these yields be if the discounted price falls to 0.94 on a dollar(i.e.,$94,000 for a 100,000 bill)? 3. an investor in the 35 percent tax bracket may purchase a corporate bond that is rated double A and is traded on the New York Stock Exchange (the bond division). this bond yields 9.0 percent. the investor may also buy a double-a- rated municipal bond with a 5.85 percent yield. why may the corporate bond be preferred?(assume that the terms of the bond are the same). 6. A six-month $10,000 treasury bill is selling for $9,844. what is the annual yield according to the discounted method? Does this yield understate or overstate the true annual yield? Explain. 11. Determine the annual repayment schedule for the first two years (I,e., interest, principle repayment, and balance owed) for each of the following.(assume that only one payment is made annually.) compare the payments required by each mortgage. what conclusions can you draw? A) A $60,000 conventional mortgage for 25 years at 10 percent B) A $60,000 conventional mortgage for 20 years at 10 percent C) A$60,000 conventional mortgage for 25 years at 8 percent

Paper#11262 | Written in 18-Jul-2015

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