I am reading about T-bill. I am not sure what mistake I am doing for calculating HPY.
A 180-day T-bill is quoted at a discount rate of 2% for the 180-day period. Calculate 180-day return (HPY).
Here’s what I did: r = (D/F) * (360/t) => D = 10; Therefore, it is priced at 1000-10 = 90. HEnce, HPY = (1000-990)/990 = 1.01%.
However, the answer fpr 180-day return is 2.041% Can someone please explain what I am missing? I calculated that I will get a correct answer if Price = 980. That means D should be 20. I am not sure how this is possible.