Chapter 4 Questions - University of Colorado Boulder

To compute the T-Bill rate we need to compute the yield to maturity over the 1 year period. We do this through goal seek in excel. If we guess a yield to maturity for the T-Bill, r, we can then value the first two T-Bond cash-flows 1 year forward. The return on the T-Bond is then (99.17+.625*(1+r)^0.5+.625 … ................
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