Question

The U.S. Treasury bill is currently selling at a discount basis of 4.25%. The par value of the bill is $100,000, and it will mature in ninety days.

What is the price of this Treasury bill?

a. $95,750.00
b. $98,937.50
c. $98,952.05
d. $99,952.78

Answer 1

The correct answer is B. $ 98,937.5

Step-by-step explanation:

The question has asked to calculate the current market value of teasury bill having face value of 1000 dollars, currently selling at discount basis of 4.25% and will mature in 90 days.

This can be calculated by using simple formula given below.

Formula

Cv =Cm −(Cm*r*d1/d2)

Legend

Cm Redeemed capital (generally par) i.e 100000

D2 Number of days per year = 360

D1 Number of days between value date and maturity date =90

r Yield rate i.e 4.25%

Putting values in above formula we get = $ 98,937.50 .