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 :% %

EBK CFIN
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ISBN:9781337671743
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Chapter5: The Cost Of Money (interest Rates)
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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
:%
%
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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