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#reading-38-working-capital-management #ss-11
We have to convert the yields of U.S. treasury and CD into bond equivalent yields. The other is in BEY.

Security 1 = discount on U.S. treasury bill = discount yield * (60 / 360) = 0.383% discount = 100*0.383% = 0.383 market price = 100-0.383 = 99.62 HPY = (100 / 99.62)-1 = 0.381% BEY = (0.381) * (365 / 60) = 2.32%

BEY of Security 2 = (0.65%) × (365 / 30) = 7.91%

BEY of Security 3 = 3.65%

So Security 2 (Bank CD) has the best BEY.
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