FOR QUESTIONS 7 AND 8, REFER TO THE

FOLLOWING INFORMATION:

You

have been presented with the following information about the Treasury Bills

(TBs) that are trading in the secondary market:

Bid/offer

= 7.53%/7.35%

Face

value = R100 000

Days

to maturity = 55

(Note:

Use 365 days.)

QUESTION

7                                                                                                      

Which of the following statements is correct?

a.   

The

price maker is prepared to buy TBs at 7.35%.

b.   

The

price maker is prepared to sell TBs at 7.53%.

c.    

The

above bid would translate into a price of R98,866.

d.   

The

above offer would translate into a price of R98,893.

1.       a and c

2.       a and b

3.       b and c

4.       c and d