The bank discount yield for a 1000 face value Treasury bill trading at 983.1 with 160 days to maturity is approximately: 1. 1.69% 2. 1.72% 3. 3.8% 4. 3.9%. It says the answer is 3.8% (1000-983.1/1000 * 360/160). I thought u calculate your “profit” ($16.9) based on what u actually forked out (983.1). Why are they using 1000 in denominator? Help!
F=Face, P=Price BDY is (F-P)/F * 360/T HPY = (F-P)/P RMM = HPY * 360/T EAY = (1+HPY)^365/t -1
Tks CP, it’s clear now. May i know what’s RMM?
or MMY money market yield… R suffix mm