Question

Assume an investor purchased a six-month t-bill with a $10 000 par value for $9,000 and sold it 90 days later discount for $9,100. What is the yield?

Answer 1

Answer: 4.51%

Step-by-step explanation:

The formula that'll be used for the calculation of the yield will be:

= (SP - PP)/PP × 365/n

where,

SP = Selling price = $9100

PP = Purchase price = $9000

n = Number of days = 90

= (9100 - 9000)/9000 × 365/90

= 100/9000 × 365/90

= 0.04506

= 4.51%

The yield is 4.51%