Final answer:
To achieve a 7% annualized return on a $10,000 one-year treasury bill, the purchase price would need to be about $9,345.79, which is less than the par value of $10,000.
Step-by-step explanation:
If investors require a 7% annualized return on a one-year t-bill with a par value of $10,000, according to the typical pricing model for such financial instruments, the t-bill's price would be less than its par value. The t-bill is discounted, meaning it is sold at a price lower than the par to yield the desired return when it matures. To calculate the price of the t-bill, you would use the formula: Price = Par Value / (1 + r), where 'r' is the required return rate.
Given this formula and a required return of 0.07 (or 7%), the calculation would be: Price = $10,000 / (1 + 0.07) which simplifies to Price = $10,000 / 1.07. The resulting t-bill's price would therefore be approximately $9,345.79.
Therefore, when assessing the content loaded question about the required return and the t-bill, we can definitively say that the price would be less than the par value of $10,000 if investors are seeking a 7% return on their investment.