Question: 1 . You purchase a six - month, $ 1 0 , 0 0 0 T - bill for $ 9 , 5 8 0

1. You purchase a six-month, $10,000 T-bill for $9,580.
a. What is the discount yield?
b. What is the annual rate of interest?
c. Does the discount yield understate or overstate the true annual compound yield? Explain.

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