- A2 Part A When The Current Rate Of Discount On Treasury Bills Is 3 25 Perform The Following Calculations I Calcula 1 (102.79 KiB) Viewed 23 times
A2 Part (a) When the current rate of discount on treasury bills is 3.25%, perform the following calculations: i. Calculate the price of a newly issued 7 month treasury bill for £135,000. [2 marks] ii. Assuming that all else remains constant, what will be its price 3 months after its issue? [1 mark] iii. If the rate of discount fell by 0.15%, what would be the price of a newly issued 5 month treasury bill for £650,000? [2 marks] When the current rate of discount on treasury bills is 2.50%, perform the following calculations: iv. Calculate the price of a newly issued 5 month treasury bill for £175,000. [2 marks] 20215 Page 2 of 9 V. If market interest rates fell by 0.75 percentage points, what would be the price of a newly issued 8 month treasury bill for £170,000? [2 marks] vi. Calculate the discount rate on a treasury bill with a redemption value of £160,000 in 5 months, purchased at £158,500. [2 marks] Part (b)