A Treasury bill purchased in December 2015 has 55 days until maturity and a bank

Question

A Treasury bill purchased in December 2015 has 55 days until maturity and a bank discount yield of 2.48 percent. Assume a $100 face value.

a.  
What is the price of the bill as a percentage of face value? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Omit the "%" sign in your response.)
  
Price   %
  
b.  
What is the bond equivalent yield? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places. Omit the "%" sign in your response.)
  
Bond equivalent yield   %

Explanation / Answer

Answer:

Given :

Bank Discount Yield =2.48% =0.0248

Days to maturity = 55

Face value = $100

Bank Discount Yield = [(par value - purchase price)/par value] * [360/days to maturity]

Hence ,

0.0248 =[(100

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