What is the price of a $50,000, 182-day T-bill on its issue date if the market rate of return on this date was 6.875%?
A) $48,342.77
B) $48,262.15
C) $48,285.96
D) $48,148.15
E) $48,320.53

Question

Quizplus · Accepted Answer

The correct answer is A.The price of a T-bill is calculated using the following formula:Price = Face value / (1 + (Discount rate * Days to maturity / 360))In this case, the face value is $50,000, the discount rate is 6.875%, and the days to maturity is 182.Plugging these values into the formula, we get:Price = 50000 / (1 + (0.06875 * 182 / 360))= 50000 / (1 + 0.034375)= 50000 / 1.034375= $48,342.77

What Is the Price of a $50,000, 182-Day T-Bill on Its