What is the discount yield, the simple yield, and the compound yield on a $10,000 nine month (270 day) treasury bill that cost $9,676? What are the same yields on a $10,000 six-month (180-day) piece of commercial paper that cost $9,721??
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The yields on the Treasury bill:?Discount yield: yd = $10,000 - 9,676 x 360 = 4.32% $10,000 270?Simple (non-compound) yield (ys): ys = ($324/49,676) x 365/270 = 4.53%?Compounded yield: ($10,000/$9,676)365/270 - 1 = 4.55%.??The yields on the commercial paper:?Discount yield: yd = $10,000 - 9,721 x 360 = 5.58% $10,000 180?Simple (non-compound) yield (ys): ys = ($279/$9,721) x (365/180) = 5.82%?Compounded yield: ($10,000/$9,721)365/180 - 1 = 5.91%.?
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