Assignment:
A bill has a bank discount yield of 6.81% based upon the asked price, and 6.90% based upon the bid price. The maturity of the bill (already accounting for skip-day settlement) is 60 days.
(a) Find the bid and asked prices of the bill.
(b) Calculate the bond equivalent yield of the bill as well as its effective annual yield based upon the asked price. Confirm that these yields exceed the discount yield.