You buy a $10,000 par Treasury bill at $9,575 and sell it 60 days later for $9,675. What was your EAR?

Name: You buy a $10,000 par Treasury bill at $9,575 and sell it 60 days later for $9,675. What was your EAR?
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Quizplus · Accepted Answer

The Effective Annual Rate (EAR) can be calculated using the formula: EAR = (1 + (Profit/Investment))^(365/Days) - 1. The profit is $9,675 - $9,575 = $100. The investment is $9,575. So, EAR = (1 + (100/9575))^(365/60) - 1 = 6.52%.

You Buy a $10,000 Par Treasury Bill at $9,575 and Sell