SHOW CALCULATION

Q2. In the following are Treasury bill quotes from the Wall Street Journal (i.e.quoted based on the bank discount yield, IBD = (FV-P)/FV)*(360)). Compute the quoted (ask) yield and the effective (annual) rate for an instrument with a 4-week to maturity in 24 days (i.e. 24 days ahead)? (Assume a 360-day year, if needed) Bid Days to Mat. 24 Asked 4.26 52 4.34 4.33 4.34 4.33 80 4.29 4.32 4.31 108 136 4.35 4.33 4.34 164 4.36 A. Quoted ask yield is 4.33%and the effective annual rate is 4.36%. B. Qu ask yield is 4.28% and the effective annual rate is 4.33%. C. Quoted ask yield is 4.33% and the effective annual rate is 4.22%. D. Quoted ask yield is 4.22% and the effective annual rate is 4.22%. E. None of the above