So i am having a couple of issues understanding the auctions of treasury bills.
I know that the treausury accepts the bids offering the highest price. The treausury accepts the competitive bids in ascending order of yield until the accepted bid reaches the offering amount. Each accepted bid is then awarded at the highest yield paid to any accepted bid.
I do not understand why it says: All bids above the 5.07% rate will be accepted, and bids below will be rejected.
First it's saying that bids up to 5.07 will be accepted and now its saying that it will reject bids below 5.07? What am i missing?
Here it actually makes sense: bidders 1, 4 and 5 will get the t bill since they are paying the highest price.
So what am i missing?