3. T-Bill Pricing (1.0 points)A dealer quotes a 220-day US Treasury Bill trading at a discount of 4%. What is theequilivant yield quoted with continuous compounding and assuming a 365 day year?A) 3.975%B) 4.000%C) 4.106%D) 4.224%E) 4.277%

3.Let's calculate the equivalent yield for the 220-day US Treasury Bill.First, let's find the…

Answered: 3. T-Bill Pricing (1.0 points) A dealer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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5-2) What is the discount yield, bond equivalent yield, and effective annual return on a $1 million Treasury bill that currently sells at 97.375 percent of its face value and is 70 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161)) Answer is complete but not entirely correct. Discount yield Bond equivalent yield Effective annual return 11.813 % 12.300% 12.904 %
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Subject:finance
M6
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1. The interest rate is 9.5% p.a. effective and the rate of inflation is 5.2% p.a. Compute the real rate of interest % Enter a percentage correct to 2 decimal places. 2. A Zero-Coupon Bond, with face value £100, that reaches maturity in 7 years sells for £66. The inflation rate is 5% p.a. effective. What is the real yield? % Enter a percentage correct to 2 decimal places.

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3. T-Bill Pricing (1.0 points) A dealer quotes a 220-day US Treasury Bill trading at a discount of 4%. What is the equilivant yield quoted with continuous compounding and assuming a 365 day year? A) 3.975% B) 4.000% C) 4.106% D) 4.224% E) 4.277%