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A T-bill that is 285 days from maturity is selling for $96,030. The T-bill has a face value of $100,000. a. Calculate the discount yield,
A T-bill that is 285 days from maturity is selling for $96,030. The T-bill has a face value of $100,000. a. Calculate the discount yield, bond equivalent yield, and EAR on the T-bill. b. Calculate the discount yield, bond equivalent yield, and EAR on the T-bill if it matures in 360 days. Complete this question by entering your answers in the tabs below Required A Required B Calculate the discount yield, bond equivalent yield, and EAR on the T-bill. (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) Discount yield Bond equivalent yield EAR
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Lets start solving the question in steps Part a 285 Days to Maturity 1 Calculate the Discount Yield The formula for the discount yield is Discount Yield Face Value Purchase Price Face Value 360 Days t...
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