Explanation:
The cash price of the bill can be calculated with the following formula:
\text{Discount} = \left( \frac{164}{360} \right) \times 9 = \`$4.1` \text{Cash price} = \text{Face Value} - \text{Discount} = 100 - 4.1 = \`$95.9`Note that,
and we can thus make the subject,
So, following the last formula,
Where
Cash price
Quoted price
Q.687 Fahim Zakaria, a fund manager based in Qatar, manages a sovereign fund for the Qatari government. The fund has more than $12.6 billion in assets under management. The fund invests only in the shares of blue-chip firms and the sovereign bonds/bills of different countries. If the manager wants to include a 164-days U.S. Treasury bill which is quoted as 9, then what is the cash price of the bill?
A
$96
B
$95.9
C
$93.7
D
$91
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