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**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%.

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**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> |