Q4 Answer B

Step 1: Assume the face value to be $100, we would like to find out the discount at which the T bill is trading

3.5 % = (D/100) * (360/120) => 3.5% = (D/100) * 3
=> D = 3.5% * 100 / 3 = $1.1667

Step 2: Once discount is calculated, Find out the price at which the bond is trading
Price = F