You have bought a 93-day US Treasury bill at 5.63%. What is the true yield?
A) 5.71%
B) 5.69%
C) 5.72%
D) 5.62%

Question

Quizplus · Accepted Answer

The true yield or bond equivalent yield (BEY) for a Treasury bill can be calculated using the formula: BEY = (Discount Rate / (1 - (Discount Rate * (Days to Maturity / 360)))) * (365 / Days to Maturity). Plugging in the values, BEY = (0.0563 / (1 - (0.0563 * (93 / 360)))) * (365 / 93) = 5.71%.

You Have Bought a 93-Day US Treasury Bill at 5