AT-bill with face value $10,000 and 87 days to maturityis selling at a bank discount ask yield of 3.4%. What is itsbond equivalent yield? (Use 360 days a year. Do notround intermediate calculations. Round your answer to 2decimal places.) The answer is 3.43 %, show how to getthis answer

The answer is in the explanation.Explanation:BEY = (Face Value - Purchase Price/Purchase Price)…

Answered: AT-bill with face value $10,000 and 87…

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

Problem 1PS

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AT-bill with face value $10,000 and 87 days to maturity is selling at a bank discount ask yield of 3.4%. What is its bond equivalent yield? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) The answer is 3.43 %, show how to get this answer