Question

The investment manager of a corporate pension fund has purchased a Treasury bill with 182 days to maturity at a price of $ 9,600 per $ 10,000 face value. The manager has computed the bank discount yield at 8 percent.
a. Calculate the bond equivalent yield for the Treasury bill. Show your calculations.
b. Briefly state two reasons why a Treasury bill’s bond equivalent yield is always different from the discount yield.


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  • CreatedJune 21, 2015
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