Mathematics

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A T-bill with face value of $10,000 and 96 days to maturity is selling at a bank discount ask yield of 4.3%. A. What is the price of the bill? (use 360 days a year) B. what is its bond equivalent yield? A. .043 * (96/360) = .011 .011 * (1-.043) = $9,890 B. 1.1% * (365/96) = 4.182% Are these answers correct?

  • Mathematics -

    A. P = Po + Po*(r/360)*t = $10,000
    Po + Po*(0.043/360)*96 = 10,000
    Po + 0.01146667Po = 10000
    1.01146667Po = 10000
    Po = $9886.63. = Amt. paid.

    B. %Yield=((10000-9886.63)/9886.63
    *365/96 = 4.36

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