Question: I need the steps not the answer. The yield on a pure-discount instrument maturing in 200 days is equal to 6.5% per year, compounded annually.
I need the steps not the answer.
The yield on a pure-discount instrument maturing in 200 days is equal to 6.5% per year, compounded annually.
(a) What would the yield on this instrument be equal to if it were quoted using the ACT/360 day-count convention? (a) 0.06320
(b) What would the yield on this instrument be equal to if it were quoted using the ACT/365 day-count convention? (b) 0.06407
(c) What would the instrument's yield be equal to if it were quoted using quarterly compounding? (c)0.06347
(d) What would the above instrument's yield be equal to if it were quoted using continuous compounding? (d)0.06297
(e) What would the above instrument's yield be equal to if it were quoted using semiannual compounding? (e)0.06398
(f) Based on these interest rates, what is the discount factor associated with this 200-day period? (f) 0.96608
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