FOR QUESTIONS 3 AND 4,

REFER TO THE FOLLOWING INFORMATION:

You have been

presented with the following information about Treasury Bills (TBs) that are

trading in the secondary market:

Bid/offer = 8.71/8.40%

Face value = R100 000

Days to maturity = 35

(Note: Use 365 days.)

 QUESTION

3                              

)

Which of the following statements are correct?

a.    The price maker is prepared to buy TBs at 8.40%. 

b.    The price maker is prepared to buy TBs at 8.71%.

c.     The above offer would translate into a price of R99 164.80.

d.    The above bid would translate into a price of R99 164.80. 

1.    a

and b

2.    b and c

3.    c and d

4.   b and d