Question

What is the price of a U.S. Treasury bill with 87 days to maturity quoted at a discount yield of 2.15 percent? Assume a $1 million face value. (Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answer #1

Discount yield= { [Face value -purchase cost]/purchase cost}*365/n

.0215 = {[1,000,000- P]/P}*365/87

.0215 *87/365 = {[1000000-P]/P

.005125 P = 1000000- P

.005125 P + P = 1000000

1.005125 P = 1000000

P = 1000000/1.005125

= $ 994,901.13

A U.S. Treasury bill with 64 days to maturity is quoted at a
discount yield of 1.75 percent. Assume a $1 million face value.
What is the bond equivalent yield? (Do not round
intermediate calculations. Enter your answer as a percent rounded
to 3 decimal places.)
Bond equivalent yield
%

Treasury bill purchased in December 2016 has 140 days until
maturity and a bank discount yield of 1.87 percent. Assume a $100
face value.
a. What is the price of the bill as a
percentage of face value? (Do not round intermediate
calculations. Round your answer to 3 decimal places.)
b. What is the bond equivalent yield?
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 3 decimal places.)

2. A U.S. Treasury bill with 140 days to maturity is quoted at a
discount yield of 1.07 percent. What is the bond equivalent
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A U.S. Treasury Bill with 92 days to maturity is quoted at a
discount yield of 2.37%.
a) Assuming a $100,000 face value, what dollar price
would you pay for this bill?
b) What holding period yield will you earn?
c) What is the effective annual yield?
d) What is the bond equivalent yield?

A T-bill with face value $10,000 and 95 days to maturity is
selling at a bank discount ask yield of 4.2%.
a. What is the price of the bill? (Use 360 days a year. Do not
round intermediate calculations. Round your answer to 2 decimal
places.)
b. What is its bond equivalent yield? (Use 365 days a year. Do
not round intermediate calculations. Round your answer to 2 decimal
places.) Bond equivalent yield %

#5
A T-bill with face value $10,000 and 88 days to maturity is
selling at a bank discount ask yield of 3.5%.
a. What is the price of the bill? (Use 360
days a year. Do not round intermediate calculations. Round your
answer to 2 decimal places.)
b. What is its bond equivalent yield? (Use
365 days a year. Do not round intermediate calculations. Round your
answer to 2 decimal places.)

You can purchase a T-bill that is 68 days from maturity for
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a. Calculate the T-bill’s quoted yield.
(Use 360 days in a year. Do not round intermediate
calculations. Round your answer to 3 decimal places. (e.g.,
32.161))
b. Calculate the T-bill’s bond equivalent yield.
(Use 365 days in a year. Do not round intermediate
calculations. Round your answer to 3 decimal places. (e.g.,
32.161))
c. Calculate the T-bill’s EAR. (Use...

You can purchase a T-bill that is 70 days from maturity for
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a.
Calculate the T-bill’s quoted yield.
(Use 360 days in a
year. Do not round intermediate
calculations. Round your answer to 3 decimal places.
(e.g., 32.161))
T-bill’s quoted yield
%
b.
Calculate the T-bill’s bond equivalent yield.
(Use 365 days in a
year. Do not round intermediate
calculations. Round your answer to 3 decimal places.
(e.g., 32.161))
T-bill’s bond...

ou can purchase a T-bill that is 95 days from maturity for
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intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161)) T-bill’s quoted yield % b. Calculate the T-bill’s
bond equivalent yield. (Use 365 days in a year. Do not round
intermediate calculations. Round your answer to 3 decimal places.
(e.g., 32.161)) T-bill’s bond...

Ch30 Q8
A three-month Treasury bill and a nine-month bill both sell at a
discount of 11%.
a-1. Calculate the annual yield of the
three-month Treasury bill. (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal
places.)
Annual yield
%_________________
a-2. Calculate the annual yield of the
nine-month Treasury bill. (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal
places.)
Annual yield
%_____________-
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