You purchased a T-bill at $99.80.If held the T-bill to maturity and returned a .8038% yield how long did you hold the T-bill?

Question

Quizplus · Accepted Answer

To solve this problem, we can use the formula for calculating the yield on a T-bill:

Yield = (Face Value - Purchase Price) / (Purchase Price x Days Held) x (360 / Days to Maturity)

We know the purchase price is $99.80 and the yield is 0.8038%. We also know that T-bills have a face value of $100, so we can plug these values into the formula:

0.8038% = ($100 - $99.80) / ($99.80 x Days Held) x (360 / Days to Maturity)

Simplifying this equation, we get:

0.008038 = 0.001003012 x (360 / Days to Maturity)

Solving for Days to Maturity, we get:

Days to Maturity = 360 / (0.008038 / 0.001003012) = 91.4

So, the answer is Choice B, 91 days.

You Purchased a T-Bill at $99