Homework Answers
Buy 180 days bank bill
Face value = $500000
Yield = 2.9% p.a
Sells after 92 days at yield of 3.2 % p.a
a)
b)
Interest to be received = $5,00,000 x 2.9% x 92/360 = $3705.55
Actual Interest received = $5,00,000 x 3.2 % x 92/360 = $4088.88
Value of yield that peter earned on this transaction = Actual Interest received - Interest to be received
= $4088.88 - $3705.55 = $383.338
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