A Treasury bill with 39 days to maturity and a $1 million face value is quoted at a price of $996,100. What is the bond equivalent yield?
A) 3.60%
B) 3.57%
C) 3.64%
D) 3.69%
E) 3.66%

Question

Quizplus · Accepted Answer

The bond equivalent yield (BEY) can be calculated using the formula: BEY = [(Face Value - Purchase Price) / Purchase Price] * (365 / Days to Maturity). Plugging in the given values: BEY = [($1,000,000 - $996,100) / $996,100] * (365 / 39) = 0.0366 or 3.66%.

A Treasury Bill with 39 Days to Maturity and a $1