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What is the discount yield on a $10,000 million certificate of deposit (CD) is selling for $9877. Assume a 181-day investment. a. 2.84% b. 2.37% c. 2.48% d. 2.45% e. 2.49%
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What is the discount yield on a $10,000 million certificate of deposit (CD) is selling for $9877. Assume a 181-day investment.

a. 2.84%
b. 2.37%
c. 2.48%
d. 2.45%
e. 2.49%

User Ibnu Habibie
by
4.9k points

1 Answer

5 votes

Answer: d. 2.45%

Step-by-step explanation:

The discount yield on an instrument can be calculated by the formula;

Discount Yield = ((Face Value - Selling Price) / Face Value) * 360 / days to Maturity

= ((10,000 - 9,877) / 10,000) * 360/181

= 0.0123 * 360/181

= 2.45%

User Artyom Chernetsov
by
4.7k points
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