Calculate the bond equivalent yield


Response to the following problem:

A T-bill that is 225 days from maturity is selling for $95,850. The T-bill has a face value of $100,000.

a. Calculate the discount yield, bond equivalent yield, and EAR on the T-bill.

b. Calculate the discount yield, bond equivalent yield, and EAR on the T-bill if it matures in 300 days.

 

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Managerial Accounting: Calculate the bond equivalent yield
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