Problem

U.S. Treasury bills are available for purchase this week at the following prices (based up...

U.S. Treasury bills are available for purchase this week at the following prices (based upon $100 par value) and with the indicated maturities:

a. $98.50, 182 days.


b. $97.50, 270 days.


c. $99.25, 91 days.

Calculate the bank discount rate (DR) on each bill if it is held to maturity. What is the equivalent yield to maturity (sometimes called the bond-equivalent or coupon equivalent yield) on each of these Treasury Bills?

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