Ask Question
29 April, 12:07

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?

+5
Answers (1)
  1. 29 April, 12:34
    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 the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers