Question
The following table that shows a partial listing of T-bills from the Wall Street Journal Outline. Rather than providing prices of each bill, the financial
The following table that shows a partial listing of T-bills from the Wall Street Journal Outline. Rather than providing prices of each bill, the financial press reports yields using the bank-discount method.
Treasury Bills | ||
August 2, 2019 | ||
Maturity | Bid (%) | Asked (%) |
10/3/2019 | 2.040 | 2.030 |
10/10/2019 | 2.033 | 2.023 |
10/17/2019 | 2.025 | 2.015 |
10/24/2019 | 2.015 | 2.005 |
Refer to the above table. Suppose the face value of each T-bill is $10,000. For the bill maturing on October 17, 2019, what is the price of the bill the dealer is buying at assuming days to maturity are 76 days? What is its bond equivalent yield?
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