A 91-day $10,000 Treasury bill is selling for $9,000. The bill's yield on a discount basis is __________ percent.

Question

Quizplus · Accepted Answer

The discount on the bill is $1,000 ($10,000 - $9,000). The yield on a discount basis is the discount divided by the face value of the bill, multiplied by 360 divided by the number of days to maturity. So, the yield on a discount basis would be:
($1,000/$10,000) x (360/91) = 0.0396, or 3.96%. Therefore, the correct answer is B.

A 91-Day $10,000 Treasury Bill Is Selling for $9,000