Review Questions

Government agency securities Commercial paper. Mortgages Eurodollars. In June 2001, John pays $9,700 for a one-year T-bill that can be redeemed for $10,000. What is the effective interest? What is the yield? The effective interest is the difference between the price of the T-bill ($9,700) and what the T-bill will be redeemed for in one year. ................
................