2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

Question

Question

2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it until maturity, what is the T-bill yield? What is the T-bill discount?

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Face Value FV = $100000

Purchase Price PP = 99500

Number of days to maturity n = 60

Hence, Yield = (FV-PP)/PP * (360/n) = (100000 - 99500)/99500 * (360/60) *100% = 3.015 %

Discount % = (FV-PP)/FV * (360/n) = (100000 - 99500)/100000 * (360/60) *100% = 3 %

Add a comment

Answer 2

Similar Homework Help Questions

What is the bank discount yield on a $100,000 face value T-bill priced at $97,900, maturing...

What is the bank discount yield on a $100,000 face value T-bill priced at $97,900, maturing in 180 days
You are considering purchasing a T-bill that has 100 days to maturity, a par value of...

You are considering purchasing a T-bill that has 100 days to maturity, a par value of $100,000, and currently sells for $99,100. What is the bank discount yield on the instrument?
Imagine there is a $100,000 T-bill that matures in 229 days. The T-bill has a discount...

Imagine there is a $100,000 T-bill that matures in 229 days. The T-bill has a discount yield of 3.629%. Ignoring fees or commissions, how much in dollars would I pay for this T-bill? (Answer in $ format xxxxx.xx, with no $ sign needed.)

you would like to purchase a t bill that has a 10,500 face value and is...

you would like to purchase a t bill that has a 10,500 face value and is due in 60 days from maturity. the current price of the t bill is 10,375. calculate the discount yield on this T-bill. You would like to purchase a T-bill that has a $10,500 face value and is 60 days from maturity. The current price of the T-bill is $10,375. Calculate the discount yield on this T-bill. (Use 360 days in a year. Do not...
1) you purchased a $1,000 par with T-bill 149 days to maturity for $962.71. you then...

1) you purchased a $1,000 par with T-bill 149 days to maturity for $962.71. you then sold this T-bill when it had 63 days to maturity for $988.27. What is your holding period of return? 2) What is the price of a money market security with the bond equilvalent yield of 8.2%, 145 days to maturity, and a $1000 face value? 3) you purchase a treasury inflation-protected note with an original principal amount of $100,000 and a 3% annual coupon...
Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))
Suppose you purchase a T-bill that is 103 days from maturity for $9,770. The T-bill has...

Suppose you purchase a T-bill that is 103 days from maturity for $9,770. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield.
Suppose you purchase a T-bill that is 103 days from maturity for $9,810. The T-bill has...

Suppose you purchase a T-bill that is 103 days from maturity for $9,810. The T-bill has a face value of $10,000. a. Calculate the T-bill’s quoted discount yield. b. Calculate the T-bill’s bond equivalent yield.

Suppose you purchase a T-bill that is 102 days from maturity for $9,820. The T-bill has...

Suppose you purchase a T-bill that is 102 days from maturity for $9,820. The T-bill has a face value of $10,000. a. Calculate the T-bill's quoted discount yield. b. Calculate the T-bill's bond equivalent yield. (For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161)) a. b. T-bill's quoted yield T-bill's bond equivalent...

2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

Homework Answers

Add Answer to:
2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

Post as a guest

Earn Coins

What is the bank discount yield on a $100,000 face value T-bill priced at $97,900, maturing...

You are considering purchasing a T-bill that has 100 days to maturity, a par value of...

Imagine there is a $100,000 T-bill that matures in 229 days. The T-bill has a discount...

you would like to purchase a t bill that has a 10,500 face value and is...

1) you purchased a $1,000 par with T-bill 149 days to maturity for $962.71. you then...

Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

Suppose you purchase a T-bill that is 124 days from maturity for $9,740. The T-bill has...

Suppose you purchase a T-bill that is 103 days from maturity for $9,770. The T-bill has...

Suppose you purchase a T-bill that is 103 days from maturity for $9,810. The T-bill has...

Suppose you purchase a T-bill that is 102 days from maturity for $9,820. The T-bill has...

2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

Homework Answers

Add Answer to: 2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...

Post as a guest

Earn Coins

Add Answer to:
2. You paid $99,500 for a $100,000 T-bill maturing in 60 days. If you hold it...