the treasurer of a large corporation wants to invest $20 million in excess short term cash in a particular money market instrument. The prospectus quotes the instrument at a true yield of 3.15 percent, that is, the EAR for this investment is 3.15 percent. However, the treasurer wants to know the money market yield on this instrument to make it comparable to the T bills and CDs she has already bought. If the term of the instrument is 90 days, what are the bond equivalent and discount yields on this investment?

U.S. Treasury STRIPS, close of business May 15, 2012:

Maturity Price Maturity Price

may '13 99.624 may'16 97.682

may '14 99.218 may '17 96.375

may '15 99.686 may '18 94.686