INVESTMENT FUNDAMENTALS

VALUATION OF TREASURY BILLS

MAIN AND CITY CAMPUS
 An investor placed an order to purchase 91-day T bills worth GHS 2800
with his bankers in early March. The investor’s bank debited his account
with an amount of GHS 2,648.73 on the 21st of March 2013.
 Find the discount rate (p.a) used to compute the price of the T.Bill.
 Find the interest rate/interest equivalent yield that the investor will
earn p.a.
 Assuming you are a treasury staff at Bank AB, your client has placed
an order to purchase T bills worth GHS 2800, show how much the
client will be debited assuming GHS 2800 is the face value. The
discount rate is 21.61%.
 Show how much this investor will have after 91 days.
 How much will this investor have after two years if all amounts are
reinvested and assuming interest rates don’t change?
 If the discount rate for a 182-day security during that same week was
23.3093%, find the interest equivalent yield.