You wish to invest $100,000 for approximately six months and are considering several high quality fixed income investments as your alternatives. You gather the following information:

Investment Price Period Yield Term (Days)

U.S. Treasury Bill 98.57 TBD 185

Merck & Co. Commercial Paper N/A 1.39% 180

Barclays Bank Certificate of Deposit N/A 1.17% 182

Citibank SOFR-linked Deposit N/A 1.14% 180 [

Note: Mercks commercial paper is rated A-1 / P-1.]

a) Which of these instruments offers the highest yield on an annualized basis?

b) What might explain the result you determined in part a) above?