If you want to change selection, open document below and click on "Move attachment"
Subject 4. Different Yield Measures of a U.S. Treasury Bill #13;
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. It is not an annualized yield.
<span>The effective annual yield is the annualized HPY on the basis of a 365-day year. It incorporates the effect of compounding interest.
Money market yield (also known as CD equivalent yield) is the annualized HPY on the basis of a 360-day year using simple interest.
last interval [days]
repetition number in this series
scheduled repetition interval
last repetition or drill
Do you want to join discussion? Click here to log in or create user.