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Determining Annual Yield

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Please help with the following problem.

The treasurer of DeShack Company has approximately $1,000,000 to invest for the next 60 days. She is considering the purchase of a T-bill with the following characteristics: face value of $1,000,000, a remaining maturity of 60 days and a quoted rate of 4.0%. She wants to determine the effective annual yield that she will receive from purchasing the T-bill and holding it to maturity.

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Solution Summary

This solution helps determine annual yield. Step by step calculations are given.

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Problem: The treasurer of DeShack Company has approximately $1,000,000 to invest for the next 60 days. She is considering the purchase of a T-bill with the following characteristics: face value of ...

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