CFA Practice Question

CFA Practice Question

Consider an investor who buys a T-Bill with 66 days to maturity, a face value of F = $1,000,000, and price of P = $990,145. What is the holding period yield quote for this U.S. T-Bill?
A. 0.00965
B. 0.965%
C. 0.00995
Explanation: The holding period yield quote for a U.S. T-Bill is calculated as follows: HPY = (F-P)/P, where HPY = holding period yield, F =face value of the T-Bill, and P = purchase price of the T-Bill. We therefore calculate the holding-period yields as follows: HPY = ($1,000,000- $990,145) / $990,145 = 0.00995 = 0.995%.

User Contributed Comments 4

User Comment
neilcorp This simplifies to F/P - 1.
indrayudha To change decimal digits on your BAII, use 2nd function on "." which is FORMAT. Enter the desired decimal digits and press ENTER.
tijean25 This must be set up to 5 decimals to get the right answers given that they are so close to each other
sshetty2 You can set your BA-II plus calc to float the decimal places by setting the decimal place value to 9... 2nd>Format>Dec=9 <Enter>
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