Compute the specified quantity. During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places. x %

Compute the specified quantity. During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places. x %

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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Question

Compute
the specified quantity.
During a month, $5,000 6-month T-bills were sold at a discount rate of only 0.45%. What was its simple annual yield r? HINT [See Example 6.] (Round your answer to four decimal places.)
X %
r =

Expert Solution

Step 1

T-bills in full form is Treasury bills, these are debt securities for a short-term period, issued by the US government. They are sold at a discount to their face value and mature in 4, 13, 26, or 52 weeks, depending on the specific type of T-bill.

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Follow-up Question

I tried 0.9066% & 0.0045% and they both came back wrong. Can we please try once more?

Im not sure if this helps, but this is from chapter two of a Finite Mathematics book titled "the mathematics of finance", Calculating Interest.

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Follow-up Question

0.0045% was said to be incorrect when trying to submit it. Can you please help me to try and find the correct simple annual yield?

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