In a Treasury auction of 182-day T-bills, the following bids were submitted:Bidder 1 bid for $500...

In a Treasury auction of 182-day T-bills, the following bids were submitted:Bidder 1 bid for $500 million at rate 0.080%; bidder 2 bid for $750 million at rate 0.084%; bidder 3 bid for 1.5 billion at rate 0.085%; bidder 4 bid for 1 billion at 0.081%; and bidder 5 bid for 300 million at rate 0.079%. If the action amount increases to 2.3 billion, meanwhile 0.4 billion non-competitive bids were submitted, then which of the following is true

Select one:

a. The t-bills will be selling at price that generates a rate of return equivalent to 0.085%

b. Bidder 2 will be awarded for his/her full amount

c. Bidder 3 will be awarded for his/her full amount

d. Bidder 4 will be awarded for his/her full amount

e. none of the above

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

In a Treasury auction of $800 million par value T-bills, the following bids were received: bidder...

In a Treasury auction of $800 million par value T-bills, the following bids were received: bidder bid amount price 1 $ 300 m 0.9820 competitive 2 $ 200 m 0.9850 competitive 3 $ 350 m 0.9825 competitive 4 $ 250 m 0.9835 competitive 5 $150 m 0.9845 competitive 6 $ 220 m Non-competitive Who will receive T-bills in this auction, in what quantity, and at what price?

Use the following table to answer questions 1 and 2. Treasury Bills Treasury bill bid and...

Use the following table to answer questions 1 and 2. Treasury Bills Treasury bill bid and ask data are representative over-the-counter quotations as of 3pm Eastern time quoted as a discount to face value. Treasury bill yields are to maturity and based on the asked quote. Treasury Bill Days to Maturity Bid Asked Chg Asked Yield A 120 0.200 0.190 -0.020 0.193 B 150 1.520 1.510 -0.002 1.545 Notes: T-bill A quote is as of April 2020. T-bill B quote...

describe a noncompetitive bid in a treasury auction process? what is a competitive bid? what happens...

describe a noncompetitive bid in a treasury auction process? what is a competitive bid? what happens to the bidders whose bid is higher than the stop out yield?

Consider a sealed-bid auction in which the seller draws one of the N bids at random....

Consider a sealed-bid auction in which the seller draws one of the N bids at random. The buyer whose bid was drawn wins the auction and pays the amount bid. Assume that buyer valuations follow a uniform(0,1) distribution. 1. What is the symmetric equilibrium bidding strategy b(v)? 2.What is the seller’s expected revenue? 3.Why doesn’t this auction pay the seller the same revenue as the four standard auctions? That is, why doesn’t the revenue equivalence theorem apply here? Be specific.

4. The following is excerpted form an article about a U.S. Treasury auction of one-month bills...

4. The following is excerpted form an article about a U.S. Treasury auction of one-month bills that resulted in a zero-percent yield. When was the last time you invested in something that you knew wouldn’t make money? In the market equivalent of shoveling cash under the mattress, hordes of buyers were so eager on Tuesday to park money in the world’s safest investment, United States government debt, they agreed to accept a zero-percent rate of return. The news sent a...

Treasury wants to issue $30 billion of 180-day Treasury bills. There are $5 billion of noncompetitive...

Treasury wants to issue $30 billion of 180-day Treasury bills. There are $5 billion of noncompetitive bids and $64 billion of competitive bids. The competitive bids are as follows: $13 billion at 2.75%; $11 billion at 3.50%; $10 billion at 4.00%; $9 billion at 3.25%; $8 billion at 3.00%; $7 billion at 3.75%; and $6 billion at 2.50%. (a) What will be the highest return/rate accepted and paid to all successful bidders? (b) What would be the bond-equivalent yield (investment...

The BEY of a 182 day,$100000 T-Bill, Sold at a 4.53% discount rate. The BEY? a....

The BEY of a 182 day,$100000 T-Bill, Sold at a 4.53% discount rate. The BEY? a. 4.01 b.4.64 c.4.70 d.5.20

1. In an English? auction, the dominant strategy is to: A. Bid when the price is...

1. In an English? auction, the dominant strategy is to: A. Bid when the price is higher than your value B. Bid until the price is above your value C. Bid until the price is lower than your value D. Bid when the price is equal to your value In? equilibrium, the winning bidder will believe the item to have_____(the lowest value/ the highest value/ no value) and will pay a price equal to the____ (lowest bidder/ highest bidder/ second-highest...

Investment in 90-day, 180-day, 360-day treasury bills denominated in Euro provide annualised yields of 6%, 6.5%...

Investment in 90-day, 180-day, 360-day treasury bills denominated in Euro provide annualised yields of 6%, 6.5% and 7% respectively. where those of identical maturities in the USA in US dollars offer 4%, 4.25% and 4.50% respectively. If the current exchange rate is Euro 1.2 / dollar, what should be the value of euro in terms of US dollar after 90 days, 180 days and 360 days ?

Brittany purchased a 182-day T-bill with interest rate of 3.75% p.a. and a face value of...

Brittany purchased a 182-day T-bill with interest rate of 3.75% p.a. and a face value of $10,000. a. How much did Brittany pay for the T-bill? Round to the nearest cent b. After 36 days, Brittany sold the T-bill when the interest rate for this T-bill in the market increased to 4.00% p.a. What was the selling price?

Subjects