A firm buys 1000000 of a 30-day commercial paper issue for


1. A bank agrees to buy T-bills from a securities dealer for $997,250, and promises to sell the securities back to the dealer in 4 days for $997,575. What is the yield on this reverse repo for the bank?

2. A firm buys $1,000,000 of a 30-day commercial paper issue for $995,450. What is the bond equivalent yield on this commercial paper?

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Financial Management: A firm buys 1000000 of a 30-day commercial paper issue for
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