You can buy commercial paper of a major US corporation for $495,000. The paper has a face value of $500,000 and is 45 days from maturity. Calculate the discount yield and bond equivalent yield on the commercial paper.
Discount Yield
D= (500000-495000)/500000*(360/45) = 0.08 i.e 8%
Bond Yield
B = (500000-495000)/495000*(365/45) = 0.08193 i.e 8.19%
You can buy commercial paper of a major US corporation for $495,000. The paper has a...
You can buy commercial paper of a major U.S. corporation for $725,000. The paper has a face value of $650,000 and is 90 days from maturity. Calculate the discount yield and bond equivalent yield on the commercial paper. (Show your work and calculations.) Please solve it correctly.
You can buy commercial paper of a major U.S. corporation for $725,000. The paper has a face value of $650,000 and is 90 days from maturity. Calculate the discount yield and bond equivalent yield on the commercial paper.
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