T-Bills T=31 days

Tasks:

HPR1=(NV-Ps)/Ps 1) Find Ps as function of n; Ps=f(n)

RBD=(NV-Ps)/NV * (365)/n 2) Find Ps as function of RBD;

APR = HPR * (365)/n 3) Drow both Charts of this functionality dependences

NV - Nominal Value ($1000)

Ps - Settlemnt price
1)
n - days to maturity
n=
HPR - Holding Period Return NV=
APR - Annual Percentage Rate APR=
RBD - Bond Discount Rate
HPR=
1- See BKM $5.1. HPR=
 Student's Name

function of n; Ps=f(n) if APR = 8%

function of RBD; Ps=f(RBD) if APR = 8%

h Charts of this functionality dependences

2)

31 RBD= 0.07946
1000 Ps= 993.2513
8% 0.08

APR/365*n
0.006795
0.00679452054794521=(1000-Ps)/Ps
Ps 993.2513
 Ps=f(n)
1000
3)
995
HPR= 0.006795 X Y
Ps= 993.2513 31 993 990
33 993
48 990
985
80 983
10 998
980

975
0 10 20 30 40 50

X Y
Ps=f(RBD
8% 993 998
6% 995 997
3% 997 996
10% 992 995
4% 997 994
5% 996 993
992
991
990
989
988
2% 3% 4% 5% 6% 7
 Ps=f(n)

20 30 40 50 60 70 80 90

Ps=f(RBD)

4% 5% 6% 7% 8% 9% 10% 11%