Please help but not handwritten 3. You can purchase a Treasury bill that is 95 days from maturity for $9,965. The Treasury bill has aface value of $10,000.a. Calculate the Treasury bill's quoted discount yieldb. Calculate the Treasury bill's bond equivalent yieldc. Calculate the Treasury bill's EAR

T-bills are issued by the federal bank and issued at a discount to the face value.Giventhe face…

3. You can purchase a Treasury bill that is 95 days from maturity for $9,965. The Treasury bill ha face value of $10,000. a. Calculate the Treasury bill's quoted discount yield b. Calculate the Treasury bill's bond equivalent yield c. Calculate the Treasury bill's FAR

3. You can purchase a Treasury bill that is 95 days from maturity for $9,965. The Treasury bill ha face value of $10,000. a. Calculate the Treasury bill's quoted discount yield b. Calculate the Treasury bill's bond equivalent yield c. Calculate the Treasury bill's FAR

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 2EP

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

Please help but not handwritten

3. You can purchase a Treasury bill that is 95 days from maturity for $9,965. The Treasury bill has a
face value of $10,000.
a. Calculate the Treasury bill's quoted discount yield
b. Calculate the Treasury bill's bond equivalent yield
c. Calculate the Treasury bill's EAR

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Step 1: Define=T-bills

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Step 2: Calculate the quoted yield of T bill as follows:

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Step 3: b. Calculation of bond equivalent yield:

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Step 4: c. Calculation of EAR:

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