Which of the following yield calculations on a Treasury bill provides the best comparison yield for competing coupon-bearing securities of the same maturity?
A) bank discount rate
B) CD equivalent rate
C) bond equivalent rate
D) the prime rate.

Question

Quizplus · Accepted Answer

The bond equivalent rate provides the best comparison for coupon-bearing securities as it annualizes the yield on a Treasury bill, making it comparable to the yields on bonds which pay interest semi-annually.

Which of the Following Yield Calculations on a Treasury Bill