Look at the Treasury Bill quotation from Friday, Feb. 10 On the day these were q

Question

Look at the Treasury Bill quotation from Friday, Feb. 10 On the day these were quoted, c. By how much (how many dollars) did the price of one of the the May 25 T-Bills (with face value of $10,000 as before) change from the day before (Thursday)? Treasury Bills DAYS TO MATURITY MAT BID ASKED CHG Feb 16 06 6 3.86 3.85 -0.21 Feb 23 06 13 4.10 4.09 -0.09 Mar 02 06 20 4.22 4.21 -0.03 Mar 09 06 27 4.26 4.25 -0.01 Mar 16 06 34 4.24 4.23 Mar 23 06 41 4.24 4.23 0.01 Mar 30 06 48 4.23 4.22 0.01 Apr 06 06 55 4.28 4270.01 Apr 13 06 62 432 431 0.01 Apr 20 06 69 4.34 433 0.01 Apr 27 06 76 4.36 4.35 0.01 May 04 06 83439 4.38 0.01 May11 06 90 440439. 18 06 97439 438 May25 06 104 4.41 440 Jun 01 06 111 4.43 4.42 Jun 08 06 118 444 4.43... Jun 15 06 125 4.46 4.45 Jun 22 06 132 4.45 4.44 Jun 29 06 139 4.45 4.44 0.01 Enter values without any punctuation. This is a Dollar Value. So for $900 enter "900" or "900.00" but not "$900" and not "nine hundred." Carry calculation to pennies

Explanation / Answer

For May 25 T-Bill we can see that the days to maturity is 104 and the Bid rate is 4.43 with face vlue to be $10,000

So now we can calculate the Present value of T-Bill to be :- 10,000 - ((104*4.43)/360*1000/100)

                                                                                                10,000-12.8 = 9,987.2

Same way if we calculate the price of May 18 T-Bill :- 10,000 - ((97*4.39)/360*1000/100)

                                                                                      10,000-4.56 = 9,995.44

So, now the price change can be calculated as 9,987.2-9,995.44 = $8.24

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