A $100,000, 168-Day Government of Canada Treasury Bill Was Purchased

Essay

A $100,000, 168-day Government of Canada Treasury bill was purchased on its date of issue to yield 2.1%.
a) What price did the investor pay?
b) Calculate the market value of the T-bill 85 days later if the rate of return then required by the market has:
(i) risen to 2.4%. (ii) remained at 2.1%. (iii) fallen to 1.8%.
c) Calculate the rate of return actually realized by the investor if the T-bill is sold at each of the three prices calculated in part (b).