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1) Calculate the bond equivalent yield for a ???-day T-bill that is purchased at the given asked yield. If the bill has a face value
1)
Calculate the bond equivalent yield for a ???-day T-bill that is purchased at the given asked yield. If the bill has a face value of $10,000, calculate its price. Okay, we struggles on these so we have a bunch | |||||
T-bill | T-bill | ||||
Face value | $10,000.00 | $10,000.00 | |||
discount asked yield | 1.851% | 2.851% | |||
term | 365 | 182 | |||
Par = Pf | $10,000.00 | $10,000.00 | |||
Price today P0 | |||||
BEY = bond equivalent yield | |||||
2)
Suppose ???-day fed funds trade at ???? percent annually. What is the yield on fed funds on a bond-equivalent basis? I am looking for decimal places here, right? | |||||
quoted fed funds rate (annual) | 0.255% | 1.020% | |||
term | 7 | 14 | |||
BEY = bond equivalent yield | x | x | |||
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