Q4. The holding period yield for a T-Bill maturing in 110 days is 1.90%. What are the equivalent annual yield (EAY) and the money market yield (MMY) respectively?

A)   6.44%; 6.22%.

B)   6.90%; 6.80%.

C)   5.25%; 5.59%.

Q5. If the money market yield is 3.792% on a T-bill with 79 days to maturity, what is the holding period yield?

A)   0.77%.

B)   0.83%.

C)   0.89%.

Q6. A broker calls with a proposal to buy a Treasury bill (T-bill) with 186 days to maturity. He says the effective annual yield on the T-bill is 4.217%. What is the holding period yield if you hold the bill until maturity?

A)   2.13%.

B)   8.44%.

C)   2.02%.

答案和详解如下：

Q4. The holding period yield for a T-Bill maturing in 110 days is 1.90%. What are the equivalent annual yield (EAY) and the money market yield (MMY) respectively?

A)   6.44%; 6.22%.

B)   6.90%; 6.80%.

C)   5.25%; 5.59%.

Correct answer is A)

The EAY takes the holding period yield and annualizes it based on a 365-day year accounting for compounding. (1 + 0.0190)^365/110 − 1 = 1.06444 − 1 = 6.44%. Using the HPY to compute the money market yield = HPY × (360 / t) = 0.0190 × (360 / 110) = 0.06218 = 6.22%.

Q5. If the money market yield is 3.792% on a T-bill with 79 days to maturity, what is the holding period yield?

A)   0.77%.

B)   0.83%.

C)   0.89%.

Correct answer is B)

The holding period yield can be calculated from the money market yield as: (money market yield) ÷ (360 ÷ t). Therefore, the HPY is (0.03792) × (79 ÷ 360) = 0.0083 = 0.83%.

Q6. A broker calls with a proposal to buy a Treasury bill (T-bill) with 186 days to maturity. He says the effective annual yield on the T-bill is 4.217%. What is the holding period yield if you hold the bill until maturity?

A)   2.13%.

B)   8.44%.

C)   2.02%.

Correct answer is A)

To calculate the HPY from the EAY, the formula is: (1 + EAY)^(t/365) − 1. Therefore, the HPY is: (1.04217)^(186/365) − 1 = 0.0213, or 2.13%.

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