The following are the bid/ask discount yields of a 9-month T-Bill:

Bid Ask

A: Buy Time 4.00% 3.80%

B: Sell Time (2 months later) 3.50% 3.35%

P = F x (1- discount x mat. days/360)

(A) Assuming you buy a T-Bill at point A, what is your buy price (Pb)?

(B) Assuming you sell this T-Bill at point B (2 months later), what is your sell price (Ps)?

(C) From (a) and (b), what is your annualized return of this transaction?

R% =(Ps Pb)/Pb x 100% x (365/no. of days held)