Question

10) During the global financial crisis in December of 2008, the 3-month, risk-free, pure discount (zero coupon) T-Bill briefly traded in the market at a price of $1002.56 per S1000 par value bond! What is the YTM on this T-Bill, expressed in EAR?

Please show the steps to finding the answer using a *Financial Calculator*! Thank you.

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Answer #1

When Using a BA II Plus Financial Calculator, YTM will be calculated as following

N = 0.25 (3/12)

PV = -1002.56

FV = 1000

CPT = I/Y

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