U.S. Treasury bills are available for purchase this week at the following prices (based upon $100 par
Question:
a. $97.25, 182 days.
b. $95.75, 270 days.
c. $98.75, 91 days.
Calculate the bank discount rate (DR) on each bill if it is held to maturity. What is the equivalent yield to maturity (sometimes called the bond-equivalent or coupon-equivalent yield) on each of these Treasury Bills?
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For 
Bank Management and Financial Services
ISBN: 978-0078034671
9th edition
Authors: Peter Rose, Sylvia Hudgins
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