Mickey Ronaldo purchased a 180 day Commonwealth Treasury Note (T-note) having a face value of $100,000 on 15 April 2014. The purchase price of the T-note was $96,730.
a) Calculate Mickey's annualised nominal rate of return based on the face value of the T-note.
b) Calculate Mickey's annualised nominal rate of return based on the purchase price of the T-note.
c) Which of the above annualised nominal rates of return is more representative of Mickey's actual rate of investment return?

Question

Quizplus · Accepted Answer

The Answer of Mickey Ronaldo purchased a 180 day Commonwealth Treasury Note (T-note) having a face value of $100,000 on 15 April 2014. The purchase price of the T-note was $96,730.
a) Calculate Mickey's annualised nominal rate of return based on the face value of the T-note.
b) Calculate Mickey's annualised nominal rate of return based on the purchase price of the T-note.
c) Which of the above annualised nominal rates of return is more representative of Mickey's actual rate of investment return?

Mickey Ronaldo Purchased a 180 Day Commonwealth Treasury Note (T-Note)