Question
In: Finance
An investor purchased a Treasury bill for $975. The bill pays $1,000 at maturity in exactly one year.
An investor purchased a Treasury bill for $975. The bill pays $1,000 at maturity in exactly one year.
(a) Compute the holding period rate of return.
(b) Does worldwide demand for T-bills increase, decrease, or remain unchanged during periods of economic, political or social instability?
(c) Are T-bills more risky, equally risky, or less risky than equity investments?
Solutions
Expert Solution
Answer a)
HPR = 1000 - 975 / 975 = 2.56%
Answer b)
worldwide demand for T-bills increase during periods of economic, political or social instability
Answer c)
T-bills are less risky than equity investments.
jeff jeffy answered 2 years agoRelated Solutions
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