Find the best solutions to your questions at Westonci.ca, the premier Q&A platform with a community of knowledgeable experts. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.
Sagot :
The rate you expect to see on a treasury bill is 5.31%.
Short-term government securities and Treasury Bills have maturities ranging from a few days to 52 weeks. The face value of bills is discounted when they are sold. Since the U.S. government backs Treasury Bills, they are regarded as a secure and conservative investment. T-Bills are typically kept until they reach maturity. However, some holders could prefer to cash out before maturity and take advantage of the benefits from the investment's short-term interest by reselling it on the secondary market.
The real rate is 3. 75%
= 3. 75/100
= 0.0375
The inflation rate is 1.5%
= 1. 5 /100
= 0.015
Therefore the rate on the treasury bill can be calculated as follows
= (1+0.015)(1+0.0375)-1
= (1.015×1.0375)-1
= 1.0531-1
= 0.0531×100
= 5.31%
Hence the rate that is expected to be seen on the treasury bill is 5.31%.
To know more about Treasury Bills refer to: https://brainly.com/question/7278415
#SPJ4
Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.
