What would be the annualized return to an investor who purchases a one-year $10,000 T-bill for $9,600 and sells it on the secondary market 90 days after the purchase for $9,750?

Question

Quizplus · Accepted Answer

The annualized return can be calculated using the formula for annualized return: [(Final Value/Initial Value)^(365/Days)]-1. Here, the initial value is $9,600, the final value is $9,750, and the days are 90. Plugging these values into the formula gives an annualized return of approximately 6.34%.

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