Show your solution 1. For each of the following Treasury Bills, calculate the discount basis yield and the investment yield: T-Bill Maturity Price per $100 Discount Yield Investment Yield A 128-day 97.9323 B 91-day 98.7312 C 28-day 96.8931 D 182-day 99.1236 E 91-day 95.7821

Show your solution 1. For each of the following Treasury Bills, calculate the discount basis yield and the investment yield: T-Bill Maturity Price per $100 Discount Yield Investment Yield A 128-day 97.9323 B 91-day 98.7312 C 28-day 96.8931 D 182-day 99.1236 E 91-day 95.7821

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

II. Show your solution 1. For each of the following Treasury Bills, calculate the discount basis yield and the investment yield:

T-Bill	Maturity	Price per $100	Discount Yield	Investment Yield
A	128-day	97.9323
B	91-day	98.7312
C	28-day	96.8931
D	182-day	99.1236
E	91-day	95.7821

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