Competitive bids and t bills


Problem: In a treasury auction of $2.5 billion par value 91 day Tbills, the following bids were submitted:

bidder Bid amount Price
1 500 mill $.9940
2 750 mill $.9901
3 1.5 bill $.9925
4 1 bill $.9936
5 600 mill $.9939

If only these competitive bids are received, who will receive T bills, in what quantity and at what price? if the treasury also received 750 mill in non competitive bids who will receive T bills in what quantity and at what price?

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Finance Basics: Competitive bids and t bills
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