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Subject 4. Different Yield Measures of a U.S. Treasury Bill ument at its maturity (that is, interest).
Since a pure discount instrument (e.g., a T-bill) makes no interest payment, its HPY is (P 1 - P 0 )/P 0 .
Note that HPY is computed on the basis of purchase price, not face value. <span>It is not an annualized yield.
The effective annual yield is the annualized HPY on the basis of a 365-day year. It incorporates the effect of compounding interest.
last interval [days]
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