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An investor buys a T-bill at a bank discount quote of 6.20 with 180 days to...

An investor buys a T-bill at a bank discount quote of 6.20 with 180 days to maturity for 9,690.00. The bill has a face value of $10,000. The investor's bond equivalent yield on this investment is _____.

  • 6.40%

  • 6.31%

  • 7.80%

  • 6.49%

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Answer #1

Yield on Investment = [ ( Sale Price - Purchase price ) / Purchase price ] * 365 / Period

                             = [ ( 10000 - 9690 ) / 9690 ] * 365 / 180

                              = 0.06487 or 6.49% Answer

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