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A T-bill quote sheet has 90-day T-bill quotes with a 5.77 ask and a 5.71 bid. If the bill has a $10,000 face value, an investor could sell this bill for _____. a. $9,857.25 b. $9,855.75 c. $9,859.21 d.
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19 votes
A T-bill quote sheet has 90-day T-bill quotes with a 5.77 ask and a 5.71 bid. If the bill has a $10,000 face value, an investor could sell this bill for _____.

a. $9,857.25
b. $9,855.75
c. $9,859.21
d. $10,000

User Jagbandhuster
by
3.1k points

1 Answer

6 votes
6 votes

Answer:

a. $9,857.25

Step-by-step explanation:

Price = Face value * (1 - Bid*Days/360)

Price = $10,000 * (1 - 5.71%*90/360)

Price = $10,000 * (1 - 5.71%*0.25)

Price = $10,000 * (1 - 0.014275)

Price = $10,000 * 0.985725

Price = $9,857.25

User Zhigong Li
by
3.3k points
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