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  3. 4. in a treasury auction of $250 million par value

4. In a Treasury auction of $250 million par value 91-day T- bills, the following...

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4. In a Treasury auction of $250 million par value 91-day T- bills, the following bids were submitted: Bidder Bid Amount Price 1 $50 million $0.9925 2 $75 million $0.9928 3 $15 million $0.9945 4 $ 100 million $0.9940 5 $60 million $0.9932 If the Treasury also received $25 million in non-competitive bids, who will receive T-bills, in what quantity, and at what price? 5. Consider two $10,000 face-value corporate bonds. One is currently selling for $9,980 and matures in 15 years. The other bond sells for $9,350 and matures in 13 years. Calculate the approximate yield to maturity (with the approximate formula I gave you in Chapter 12) for both bonds if each has a coupon rate equal to 5%. Assuming a yearly coupon payment, find which bond is a better buy

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