You are considering purchasing a T-bill that has 100 days to maturity, a par value of...
You are considering purchasing a T-bill that has 100 days to maturity, a par value of $100,000, and currently sells for $99,100. What is the bank discount yield on the instrument?
Homework Answers
Bank discount yield = [(Face value - price) / face value] * (360 / number of days)
Bank discount yield = [(100,000 - 99,100) / 100,000] * (360 / 100)
Bank discount yield = 0.009 * 3.6
Bank discount yield = 0.0324 or 3.24%
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