the market yield-to-maturity for a 1-year T-bill having a current mark
QUESTION
the market yield-to-maturity for a 1-year T-bill having a current market price of $9809 and a face(final) value of $10,000 is?
Concept: Current Bond Price can be calculated by: Current Bond Price = Annual Coupon Payment*[1-1/(1+r)^n]/r + Par Value/(1+r)^n Where r -> Yield to Maturity n -> Number of Periods (in Years) Annual Coupon Payment = Coupon Rate*Par Value of Bond Solution:¦
Par Value of T-bill = $10000 Current Bond Price = $9809 Maturity of Bond = 1Year According to Bond Price Formula: $9809= $10000/(1+r)^1 So, Yield to MAturity (YTM) = 1.95%
ANSWER:
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