Answer: An investor could buy this bill for $9837 .
We follow these steps to arrive at the answer:
First we calculate the interest on the bill for 180 days, assuming that the value of the T-bill is $1.
We consider the ask rate since this is the rate an investor will get from buying this bill.
[tex]Interest on the bill = Int rate * \frac{No. of days to maturity}{360}[/tex]
[tex]Interest on the bill = 0.0326 * \frac{180}{360}[/tex]
[tex]Interest on the bill = 0.0163[/tex]
A t-bill doesn't pay interest; instead the interest amount is deducted from the Face Value in order to arrive at the purchase price.
If the face value of the t-bill is $1, the purchase price is [tex]1 - 0.0163 = 0.9837[/tex]
Since the actual face value of the t-bill is $10,000, the purchase price is
[tex]10,000 * 0.9837 = 9,837[/tex]
