Question

A T-Bill has 91 days until maturity. The price of the T-Bill is R12 less than the face value of R1 000. What is the discount yield for this T-Bill? Cannot be determined with the information provided 4.80% 4.87% 4.75%

Answer 1

The discount yield of a T-Bill with 91 days until maturity that is priced R12 less than its R1 000 face value is calculated to be 4.75%.

Step-by-step explanation:

The question you've asked relates to the calculation of the discount yield on a Treasury Bill (T-Bill) with a specific set of details. Given that a T-Bill has 91 days until maturity and the price is R12 less than its face value of R1 000, we can proceed with the following calculation: Discount Yield = (Discount/Face Value) × (360/Days to Maturity).

In this case, the Discount we have is R12, and the Face Value is R1 000. The Days to Maturity are 91 days. Substituting these values into the calculation provides: Discount Yield = (12/1,000) × (360/91) = 0.012 × 3.9560 = 0.0475 or 4.75%. Therefore, the discount yield for this T-Bill is 4.75%.