Question
you would like to purchase a t bill that has a 10,500 face value and is due in 60 days from maturity. the current price of the t bill is 10,375. calculate the discount yield on this T-bill.
You would like to purchase a T-bill that has a $10,500 face value and is 60 days from maturity. The current price of the T-bi
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Discount yield is mathematically represented as:

(of May)=*

YD = 10500 – 10375, 360 10500 * 60

yp = 0.011905 * 6

yp = 0.0714

Discount Yield = 7.14%

Add a comment
Know the answer?
Add Answer to:
you would like to purchase a t bill that has a 10,500 face value and is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You would like to purchase a T-bill that has a $13,500 face value and is 66...

    You would like to purchase a T-bill that has a $13,500 face value and is 66 days from maturity. The current price of the T-bill is $13,375. Calculate the discount yield on this T-bill. (Use 360 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Discount yield

  • Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

    Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

  • Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

    Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

  • Suppose you purchase a T-bill that is 102 days from maturity for $9,820. The T-bill has...

    Suppose you purchase a T-bill that is 102 days from maturity for $9,820. The T-bill has a face value of $10,000. a. Calculate the T-bill's quoted discount yield. b. Calculate the T-bill's bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) a. b. T-bill's quoted yield T-bill's bond equivalent...

  • Help Suppose you purchase a T-bill that is 105 days from maturity for $9,840. The T-bill...

    Help Suppose you purchase a T-bill that is 105 days from maturity for $9,840. The T-bill has a face value of $10.000 a. Calculate the T-bill's quoted discount yield. b. Calculate the T-bill's bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g. 32.161)) T-bill's quoted yield T-bill's bond equivalent yield...

  • Suppose you purchase a T-bill that is 103 days from maturity for $9,770. The T-bill has...

    Suppose you purchase a T-bill that is 103 days from maturity for $9,770. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield.

  • A T-bill with face value $10,000 and 91 days to maturity is selling at a bank...

    A T-bill with face value $10,000 and 91 days to maturity is selling at a bank discount ask yield of 3.8%. a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Price of the bill 9,906.17 b. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond equivalent yield 3.80 %

  • A T-bill with face value $10,000 and 79 days to maturity is selling at a bank...

    A T-bill with face value $10,000 and 79 days to maturity is selling at a bank discount ask yield of 2.6%. a. What is the price of the bill? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Price of the $ 4,294.45 bill b. What is its bond equivalent yield? (Use 365 days a year. Do not round intermediate calculations. Round your answer to...

  • i need #4 and 5 3. A Treasury bill has a face value of $10,000, is...

    i need #4 and 5 3. A Treasury bill has a face value of $10,000, is selling for $9,800, and matures in 78 days. i. What is its discount rate? (9.231%) ii. What is the bond equivalent yield (BEY) if you purchase the security now? (9.550%) ii, Suppose that you purchase this bill and held it for 60 days and then sell it for S9,954.846154. What is the yield on your investment? (9.612%) iv. What is the effective annual yield...

  • QR T-Bill = [(Face Value - Price)/(Face Value)] / [time in years based on 1 year...

    QR T-Bill = [(Face Value - Price)/(Face Value)] / [time in years based on 1 year = 360 days] Jenna decides to purchase a U.S. Treasury Bill for 95,000. The Treasury Bill matures in 180 days for 100,000. Let QR be the quoted rate on this U.S. Treasury Bill. Let j be the annual effective yield on this U.S. Treasury Bill assuming a 365 day year. Calculate j -QR. A. 0.25% B. 0.40% C. 0.65% D. 0.96% E. 1.23%

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT