Answered

Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Discover a wealth of knowledge from professionals across various disciplines 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.

a t-bill with face value $10,000 and 95 days to maturity is selling at a bank discount ask yield of 4.2%. required: a. what is the price of the bill?

Sagot :

chilljain33

In a situation where a t-bill with face value $10,000 and 95 days to maturity is selling at a bank discount ask yield of 4.2%, then the price of the bill will be $9,889.17.

What is the significance of bank discount?

A bank discount can be referred to or considered as the service offered by a bank to grant the amount of a T-bill to the customer, and hold the right to collect the actual amount of T-bill upon its maturity.

From the given information and formula, it can be ascertained that

Bank Discount = Rate x (Days / 365)

Bank Discount = 0.0420 × (95/365) = 0.011

Solving further, the price of the T-bill according to its face value will be,

Price = Face value x (1 – bank discount)

Price = 10000 x (1 – 0.011)

Price = $9,889.

Therefore, the significance regarding the bank discount has been aforementioned.

Learn more about bank discount here:

https://brainly.com/question/4533136

#SPJ4

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.