Discount Pricing, Financial Management

Discount Pricing

The T-bills are issued at a discount to face value and hence have no coupon.

Commission rates on round lots generally range from $12.50 to $25.00 per $1 million of T-Bills, depending on the maturity of indebtedness is issued with the T-Bill and there is no engraved matter on the T-Bill specifying the terms. The purchase is simply recorded by a book-entry system by the Federal Reserve Bank.

Interest earned is the difference between the price paid to purchase the instrument and the amount received upon maturity. The value of T-bill price is face value less discount at a given interest rate. The discount is based on a 360-day year and the number of days between date of purchase and maturity date and is quoted per $100 of face value.

 

Posted Date: 9/11/2012 4:12:50 AM | Location : United States







Related Discussions:- Discount Pricing, Assignment Help, Ask Question on Discount Pricing, Get Answer, Expert's Help, Discount Pricing Discussions

Write discussion on Discount Pricing
Your posts are moderated
Related Questions

Foreign Exchange Market Equilibrium: We say that the foreign exchange market is in equilibrium when deposits of all currencies o er the same expected rate of return (when retu

Q. What are the Benefits of Holding Inventories? (1) Timing of Demand and Supply: - Requirement to hold inventory of raw materials arises because it isn't possible for a firm

This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer

Compare and contrast a defined benefit and a defined contribution pension plan. In a defined benefit plan, retirement benefits are defined by a formula that generally considers t

a) Globalisation refers to the interdependence and integration of economic, social and politic issues (services, goods, people and capital), across the world. For example, consumer

Return on Investment (ROI) In accounting it is a measure of the earning power of an industries asset. A high return on investments is desirable. ROI is widely described as net

Q. What is Accelerated Depreciation? Accelerated Depreciation - Method which records greater DEPRECIATION than STRAIGHT-LINE DEPRECIATION in the early years and less depreciati

Q. Explain the Procedure to Find Out IRR? Procedure to Find Out IRR:- Step I : Compute the fake payback period   Fake Payback Period = Initial Cash Outflows / A

K is a kitchen and bathroom design and installation company which currently has showrooms in one region only of Country T. The company has enjoyed considerable success since it was