What is quoted yield of a $10,000 face value T-bill would with a market price of

Question

What is quoted yield of a $10,000 face value T-bill would with a market price of $8,885 if there are 10,25,50,100, and 250 days to maturity? PLEASE SHOW WORK!!!! 100% pen Save Print Import Copy Paste Format Undo Redo AutoSum Sort A-z Sort Z-A Gallery Toolbox Zo C. Chapter 5 What is the quoted yield of a $10,000 face value T-bill with a market price of $8,885 F there are 10, 25, 50 | 100, and 250 daysto maturity?--| Select the red highlighted items below for tips and suggestions to complete this problem. Face value Market Days to Maturity - 10 25 50 50 100 250 Bid Price Pri $10,000$8 $10,000 $10,000 10,000 5$10,000$8,885 $8,885 $8,885 $8,885 $2 01 $1 So 6 $10,000 $8,885 19 50 51 52 53 T-bill formula Enter the formula for calculating a T- bill yield found in section 3 of this chapter

Explanation / Answer

Yield = (FV - Price)/Fv *100

Annualized return = Yield * 365/ Number of days

Yield = (10,000-8,885)/10,000 *100 = 11.15%

(i) 10 Days : 11.15%* 365/10 = 406.975%

(ii) 25 Days : 11.15%*365/25 = 162.79%

(iii) 50 days: 11.15%*365/50 = 81.395%

(iv) 100 days : 11.15% *365/100 = 40.4975%

(v) 250 days : 11.15%*365/250 = 16.279%

(Note: Some use 360 days in a year and other 365. We have used 365 days)

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