A bank- accepted bill contract has been quoted as being priced at 95.60 by a futures trader.What does this mean?
A)The bill's yield is 95.60 per cent.
B)The bill's yield is 4.40 per cent.
C)The price of the bill is $95.60.
D)The settlement price for the futures contract is $95.60.

Question

Quizplus · Accepted Answer

When a bank-accepted bill is priced at 95.60, it means the bill's yield is 4.40%. The price of the bill is calculated as 100 - yield, so in this case, the price of the bill would be 100 - 95.60 = $4.40. The settlement price for the futures contract may or may not be the same as the bill's price, as it depends on other factors such as delivery date and market conditions.

A Bank- Accepted Bill Contract Has Been Quoted as Being