You bought a $10,000 T?bill for $9,750 and held it for 13 weeks until it matured

Finance Jan 15, 2021

You bought a $10,000 T?bill for $9,750 and held it for 13 weeks until it matured.
a. What was your one?period rate of return over this 13?week period?
b. What was your annual rate of return?

Expert Solution

a. one?period rate of return=(face value-purchase price)/purchase price=(10,000-9,750)/9,750=2.56%

b. annual rate of return=(one?period rate of return*52 weeks)/13 weeks (52 weeks in a year)

annual rate of return=(2.56%*52)/13=10.26%

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