Submitted by hamta_ball t3_11eegh5 in personalfinance
PetMeFeedMeCuddleMe t1_jaeha30 wrote
T bills are sold at a discount. You do not get any coupon payments. The equivalent issue yield is a calculation that is done to allow you to benchmark the bills' yield against yielding securities such as notes and bonds.
I wouldn't worry too much about the calculation, it is not the same formula as an APY calculation, but I have done it below for you. The point of the matter is for you to use ECY as a benchmark.
So, your bill, 912796Y78, cleared at a price of 99.65. The formula is (Face -price)/price * (365/maturity in days) because treasuries use an actual/365 day count convention.
Face = 100, price = 99.65. plug the numbers in and you get the ECY.
Viewing a single comment thread. View all comments