Question

A $25,700, 91-day Province of Newfoundland Treasury bill was originally purchased at a price that would yield the investor a 5.438% rate of return if the T-bill is held until maturity. Thirty-four days later, the investor sold the T-bill through his broker for $25,575.

a. What price did the original investor pay for the T-bill? (Do not round the intermediate calculations. Round your answer to the nearest cent.)




b. What rate of return did the first investor realize during his holding period? (Do not round the intermediate calculations. Round your answer to three decimal places.)



c. If the broker sells the t-bill to a second investor for $25,575, what rate of return will the second investor realize if he or she holds the t-bill until maturity? (Do not round the intermediate calculations. Round your answer to three decimal places.)