Problem 5-6 (LG 5-2) Suppose you purchase a Treasury bill that is 124 days from maturity for $9,740. The Treasury bill has a face value of $10,000. a. Calculate the Treasury bill's quoted discount yield. b. Calculate the Treasury bill's bond equivalent yield. Note: For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161) a. Treasury bill's quoted discount yield b. Treasury bill's bond equivalent yield :% %
Problem 5-6 (LG 5-2) Suppose you purchase a Treasury bill that is 124 days from maturity for $9,740. The Treasury bill has a face value of $10,000. a. Calculate the Treasury bill's quoted discount yield. b. Calculate the Treasury bill's bond equivalent yield. Note: For all requirements, use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161) a. Treasury bill's quoted discount yield b. Treasury bill's bond equivalent yield :% %
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
Problem 11PROB
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![Problem 5-6 (LG 5-2)
Suppose you purchase a Treasury bill that is 124 days from maturity
for $9,740. The Treasury bill has a face value of $10,000.
a. Calculate the Treasury bill's quoted discount yield.
b. Calculate the Treasury bill's bond equivalent yield.
Note: For all requirements, use 360 days for discount yield and
365 days in a year for bond equivalent yield and effective annual
return. Do not round intermediate calculations. Round your
percentage answers to 3 decimal places. (e.g., 32.161)
a. Treasury bill's quoted discount yield
b. Treasury bill's bond equivalent yield
:%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab13d144-5dbe-41c9-be1e-68ccaea12f0e%2Fd7c9e0f6-12ec-4628-b7af-88ce5655de06%2Fdq935z_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 5-6 (LG 5-2)
Suppose you purchase a Treasury bill that is 124 days from maturity
for $9,740. The Treasury bill has a face value of $10,000.
a. Calculate the Treasury bill's quoted discount yield.
b. Calculate the Treasury bill's bond equivalent yield.
Note: For all requirements, use 360 days for discount yield and
365 days in a year for bond equivalent yield and effective annual
return. Do not round intermediate calculations. Round your
percentage answers to 3 decimal places. (e.g., 32.161)
a. Treasury bill's quoted discount yield
b. Treasury bill's bond equivalent yield
:%
%
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