(Solution) If A Six- Month Treasury Bill Is Purchased For \$ 0.9675 On A Dollar ( I. E., \$ 96,750 For A \$ 100,000 Bill), What Is The Discount Yield, The Annual | Snapessays.com

(Solution) If a six- month Treasury bill is purchased for \$ 0.9675 on a dollar ( i. e., \$ 96,750 for a \$ 100,000 bill), what is the discount yield, the annual

If a six- month Treasury bill is purchased for \$ 0.9675 on a dollar ( i. e., \$ 96,750 for a \$ 100,000 bill), what is the discount yield, the annual rate of interest, and the compound rate? What will these yields be if the discount price falls to \$ 0.94 on a dollar ( i. e., \$ 94,000 for a \$ 100,000 bill)? 2. An investor is in the 28 percent income tax bracket and can earn 3.3 percent on a non-taxable bond. What is the comparable yield on a taxable bond? If this same investor can earn 5.9 percent on a taxable bond, what must be the yield on a nontaxable bond so that the after- tax yields are equal? 3. An investor in the 35 percent tax bracket may purchase a corporate bond that is rated double B and is traded on the New York Stock Exchange ( the bond division). This bond yields 9.0 percent. The investor may also buy a double- B- rated municipal bond with a 5.85 percent yield. Why may the corporate bond be preferred? ( Assume that the terms of the bonds are the same.)

Solution details:
STATUS
QUALITY
Approved

This question was answered on: May 23, 2022

Solution~00021147719535.zip (25.37 KB)

This attachment is locked

Our expert Writers have done this assignment before, you can reorder for a fresh, original and plagiarism-free copy and it will be redone much faster (Deadline assured. Flexible pricing. TurnItIn Report provided)

STATUS

QUALITY

Approved

May 23, 2022

EXPERT

Tutor