Does this yield understate or overstate the true annual, Finance Basics

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Does this yield understate or overstate the true annual

A six-month $10,000 Treasury bill is selling for $9,844. What is the annual yield according to the discount method? Does this yield understate or overstate the true annual yield? Explain.

The answer in the back of the book is:

3.12% discount yield
3.19% annualized yield

How did they come up with this? Do not copy the other chegg answer, parts of it were wrong and make it so I can easily copy and paste the content!

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Finance Basics: Does this yield understate or overstate the true annual

Reference No:- TGS0724419

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Recent Questions Asked Finance Basics

Q : Actual error probabilities

Q : Determine the annual repayment schedule

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Q : Does this yield understate or overstate the true annual

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Does this yield understate or overstate the true annual

Reference No:- TGS0724419

Recent Questions Asked Finance Basics

Q : Actual error probabilities

Q : Determine the annual repayment schedule

Q : Why may the corporate bond be preferred

Q : Find the force constant of the spring

Q : Does this yield understate or overstate the true annual

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Q : What average power is delivered by person pulling on rope

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