Reddit

Question 169.3. The Cash Price for $1 million in face value of U.S. Treasury bills, with 180 days to maturity, is $967,500. What is the Quoted Price (a.k.a., discount yield)? | Financial Risk Manager Part 1 Quiz - LeetQuiz

Explanation:

First convert the cash price into a price per $100 face value:

\frac{967,500}{1,000,000/100} = 96.75

Then apply the T-bill discount quote formula:

P = \frac{360}{n}(100 - Y)

With $n = 180$ and $Y = 96.75$ :

P = \frac{360}{180}(100 - 96.75) = 2 \times 3.25 = 6.50

So the correct answer is 6.50.

Comments (0)

No comments yet.