Question

Janine is interested in a short-term investment and is comparing the yields of several products. She is considering a 360-day T-bill that is priced at $97,645. If the face value of the T-bill is $100,000, what is the quoted yield for this T-bill?quoted yield = (((face value - price) price) x (365 term)) x 100

Answer 1

The quoted yield for the 360-day T-bill that Janine is considering, which has a face value of $100,000 and is priced at $97,645, is approximately 2.44%.

Step-by-step explanation:

Janine is looking to calculate the quoted yield for a 360-day Treasury bill (T-bill) that has a face value of $100,000 and is priced at $97,645. The formula to calculate the quoted yield is:

((face value - price) / price) x (365 / term) x 100

Plugging Janine's numbers into this formula:

((100,000 - 97,645) / 97,645) x (365 / 360) x 100

The calculation simplifies to:

((2,355 / 97,645) x 1.01389) x 100

Performing the calculations yields:

(0.02411 x 1.01389) x 100

Which equals a quoted yield of approximately 2.44%.