NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments
Mr. Arjun Mehta holds a 91-day Treasury Bill with a face value of Rs 1,00,000 bought at Rs 98,500 at auction. Using a 365-day year, what is the approximate annualised yield on the bill (simple, based on purchase price)?
The annualised yield is about 6.11%. The gain of Rs 1,500 on a purchase price of Rs 98,500 is 1.523% over 91 days, and scaling by 365/91 gives 6.11%. Using face value as the base would wrongly give about 6.00%.
- A6.11%Correct
- B1.52%
- C6.00%
- D1.50%
Explanation
Gain = 1,00,000 - 98,500 = 1,500. Return over 91 days = 1,500/98,500 = 1.523%. Annualised = 1.523% x 365/91 = 6.11%. Using face value as base gives about 6.00% (wrong base), and 1.52% or 1.50% are unannualised.
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