Question

i.) Use a table to name and differentiate the various types of financial markets. (What does each type do?) [6]

ii.) A U.S. Treasury bill with a face value of $100,000 and 160 days to maturity is selling for $97,500.

a. What is the T-bill’s bank discount yield? [2]

b. What is the T-bill’s money market yield? 

Answer 1

i.

ii.

a. 100000 - 97500 = $ 2500

b. $ 97500