In January 2020, three-month (91-day) Treasury bills were selling at a discount of 1.68%. What was the annual yield? Assume 365 days in a year. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Annual yield %

In January 2020, three-month (91-day) Treasury bills were selling at a discount of 1.68%. What was the annual yield? Assume 365 days in a year. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Annual yield %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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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

In January 2020, three-month (91-day) Treasury bills were selling at a discount of 1.68%. What was the annual yield? Assume 365 days
in a year.
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Annual yield
%

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