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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments

A 91-day Treasury Bill with face value Rs 100 is issued at a price of Rs 98.50. What is the approximate annualised yield, using simple interest on the issue price and a 365-day year, rounded to two decimals?

The annualised yield is about 6.11%. The gain of Rs 1.50 on an investment of Rs 98.50 is 1.5228% over 91 days, and scaling by 365/91 gives roughly 6.11%. Using the face value as the base would wrongly understate the yield.

  1. A6.11%Correct
  2. B6.01%
  3. C1.52%
  4. D6.09%

Explanation

Discount gain is 100 - 98.50 = Rs 1.50. Return over 91 days = 1.50/98.50 = 1.5228%. Annualised = 1.5228% x 365/91 = 6.108%, about 6.11%. Using 1.50/100 as the base gives 6.01%, which is the wrong base. 1.52% is not annualised.

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