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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Introduction to the Indian Financial Markets

A 91-day Treasury Bill with face value Rs 100 is issued at Rs 98.50. Using a 365-day year, what is the approximate annualised yield (simple, on the purchase price) to the investor, rounded to two decimals?

The annualised yield is about 6.11%. The gain of Rs 1.50 on a purchase price of Rs 98.50 is 1.5228% over 91 days, and scaling by 365/91 gives roughly 6.11% per year on a simple basis.

  1. A6.00%
  2. B6.11%Correct
  3. C6.07%
  4. D1.52%

Explanation

Gain is 100 - 98.50 = 1.50. Return for the period is 1.50/98.50 = 1.5228%. Annualised: 1.5228% x 365/91 = 6.108%, about 6.11%. Using face value as the base gives 6.00%-ish, which is the wrong base; 1.52% is not annualised.

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