CFA, Level I, Cor­po­ra­te Finan­ce, Purcha­se Pri­ce and Money-Market-Yield

Con­si­der an 85-day $ 1,000,000 U.S. T‑bill sold at a dis­count rate of 8.5 per­cent. Calculate

a) the purcha­se price,

b) the money mar­ket yield and

Solu­ti­on.

a) We get

purcha­se pri­ce = 1,000,000 – [0,085·(85/360)·(1,000,000)]

= 1,000,000 – 20,069,44

= $ 979,930,56.

b) Then, the mar­ket yield com­pu­tes to

money mar­ket yield = (face value – purcha­se price)/purchase price·(360/number of days to maturity)

= (1,000,000 – 79,930,56)/979,930.56·(360/85)

= 20,069,44/979,930.56·4.2353

= 0.,0867

= 8.67 percent.

0 responses on "CFA, Level I, Corporate Finance, Purchase Price and Money-Market-Yield"

    Leave a Message

    Deine E-Mail-Adresse wird nicht veröffentlicht. Erforderliche Felder sind mit * markiert.