URGENTLY NEED HELP FOR THE FOLLOWING QUESTIONS:
1) A $112,000, 90-day commercial paper certificate issued by Bell Canada Enterprises was sold on its issue date for $110,100.
What annual rate of return will it yield to the buyer?
2) 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.)
Price $
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.)
Rate of return
%
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.)
Rate of return
%
3) Suppose that the current rates on 180- and 360-day GICs are 1.25% and 1.50%, respectively. An investor is weighing the alternatives of purchasing a 360-day GIC versus purchasing a 180-day GIC and then reinvesting its maturity value in a second 180-day GIC. What would the interest rate on 180-day GICs have to be 180 days from now for the investor to end up in the same financial position with either alternative?
4) You buy a house from your brother and promise to pay him the $25,000 down payment in 2 years with 1.25% simple interest. You decide to pay off the down payment early, in one year. What amount will settle the debt if money can earn 0.75%?
0 answers