Homework Answers
ANSWER A):
Cecilia pays 34174.13 for the T Bill having face value of 35000 maturing on 14 feb
Annualized yield rate = (Face value - Amount paid for t bill) divided by Face value of T Bill
= (35000- 34174.13 ) / 35000
=0.023596 this yield is upto 14 feb from 8 december that is for 69 days
so for calculating annualized yield this yield has to be divided by 69 & multiplied with 365 days , so as to arrive at the annual yield on T Bill
=(0.023596 divided by 69days and multiplied with 365 days) multiplied by 100
Annual yield on T Bill = 12.482%
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