Ask Question
22 March, 12:52

What is the discount yield, bond equivalent yield, and effective annual return on a $1 million treasury bill that currently sells at 93.375 percent of its face value and is 65 days from maturity?

+1
Answers (1)
  1. 22 March, 16:48
    0
    Discount yield:

    IT - bill, dry = (($ 1 million - $ 973,750) / $ 1 million) (360 / 65) = 14.538%

    Bond equivalent yield : IT - bill, bey = (($ 1 million - $ 973,750) / $973,750) (365 / 65) = 15.138%

    EAR:

    EAR = (1 + 0.15138 / (365 / 65)) 365 / 65 - 1 = 16.111%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “What is the discount yield, bond equivalent yield, and effective annual return on a $1 million treasury bill that currently sells at 93.375 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers