1. Suppose a U.S. Treasury bill, maturing in 30 days, can be purchased today for $99,500. Assuming that the security is held until maturity, the investor will receive $100,000 (face amount). Determine the percentage holding period return on this investment.
2. Suppose a Midwest Telephone and Telegraph (MTT) Company bond, maturing in one year, can be purchased today for $975. Assuming that the bond is held until maturity, the investor will receive $1,000 (principal) plus 6 percent interest (that is, 0.06 $1000 $60). Determine the percentage holding period return on this investment.