A Treasury discount yield on a three-month (90 days) T-bills was 2.36%.
What is the price per $100 of par value given this yield?
Using your answer for the price, what is the "corrected" annual yield?
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Price of T-Bill = maturity value- [maturity value×discount rate×(number of days to maturity/360)]
Price of T-Bill = $99.41 (rounded off)
Price of T-Bill as a percentage of Face Value = 99.41%
Bond Equivalent Yield or corrected Annual yield = [(Maturity Value - Purchase Price)/Purchase Price]×(365/number of days left to maturity)]
corrected Annual yield = [(100 - 99.41)/99.41]×(365/90)
corrected Annual yield = 2.407%
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