Suppose that you purchase the T-bill maturing on October 24, 2013, for $9,998.599. The T-bill matures 123 days after the settlement date, June 23, 2013, and has a face value of $10,000. What is the T-bill’s asked discount yield. (10,000-9,998.599)/9,998.599 = the answer to this is 0.00014012 but I am not getting this? Can you tell me step by step how to get this answer?
Suppose that you purchase the T-bill maturing on October 24, 2013, for $9,998.599. The T-bill matures 123 days after the settlement date, June 23, 2013, and has a face value of $10,000. What is the T-bill’s asked discount yield. (10,000-9,998.599)/9,998.599 = the answer to this is 0.00014012 but I am not getting this? Can you tell me step by step how to get this answer?
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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Suppose that you purchase the T-bill maturing on
October 24, 2013, for $9,998.599. The T-bill matures
123 days after the settlement date, June 23, 2013, and
has a face value of $10,000. What is the T-bill’s asked
discount yield.
(10,000-9,998.599)/9,998.599 = the answer to this is 0.00014012 but I am not getting this? Can you tell me step by step how to get this answer?
Expert Solution
Step 1
T-bills are the short term investment securities issued by the government. The maturity period of these securities is usually less than one year.
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