Compute the specified quantity. During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places. x %
Compute the specified quantity. During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places. x %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![Compute
the specified quantity.
During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places.)
X %
r =](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F82ef0ef6-c23e-4579-9980-5531f4011b7f%2F670c3678-77a7-475c-a56a-9c1aa28c69b2%2Fma7gtw6_processed.png&w=3840&q=75)
Transcribed Image Text:Compute
the specified quantity.
During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places.)
X %
r =
Expert Solution
Step 1
T-bills in full form is Treasury bills, these are debt securities for a short-term period, issued by the US government. They are sold at a discount to their face value and mature in 4, 13, 26, or 52 weeks, depending on the specific type of T-bill.
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Follow-up Question
I tried 0.9066% & 0.0045% and they both came back wrong. Can we please try once more?
Im not sure if this helps, but this is from chapter two of a Finite Mathematics book titled "the mathematics of finance", Calculating Interest.
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0.0045% was said to be incorrect when trying to submit it. Can you please help me to try and find the correct simple annual yield?
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