The yield of a $100 000 180-day bill decreases from 6% to 7%.What is the effect on the price of the bill?

Name: The yield of a $100 000 180-day bill decreases from 6% to 7%.What is the effect on the price of the bill?
Brand: Quizplus
Rating: 4.8 (45 reviews)

Question

Quizplus · Accepted Answer

Using equation 5.1 ,the initial price of the $100 000 bill with a yield of 6% and with 180 days to maturity is $97 126.13.At the new yield of 6%,the price of the note is $96 663.14,which represents a change in price of -$463.00.

The Yield of a $100 000 180-Day Bill Decreases from 6