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This lecture is from Finance. Key important points are: Pricing Money Market Securities, Treasury Bills, Obligations of Government, Discount and Mature, Issue Price, Tax Purposes, Calculate the Price, Solving for Yield, Market Price, Days to Maturity
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term to maturity of one year or less
value is treated as interest income (for tax purposes in
Canada)
formula:
1
T Bill
F P n BEY B
=
Pricing Treasury Bills
Where: P = market price of the T Bill F = face value of the T Bill BEY = the bond equivalent yield n = the number of days until maturity B = the annual basis (365 days in Canada)
formula and solve for BEY.
days to maturity and a market price of $98,200?
P n
Pricing Treasury Bills