NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments
Mr. Kapoor holds a 91-day Treasury Bill with face value ₹1,00,000 which he bought at ₹98,500. Ignoring compounding and using a 365-day year, what is the approximate annualised yield on his investment, based on the purchase price?
The annualised yield is about 6.11%. The gain of ₹1,500 on a purchase price of ₹98,500 is 1.523% over 91 days, and scaling by 365/91 gives roughly 6.11% a year, using the purchase price as the base.
- AApproximately 6.11%Correct
- BApproximately 6.03%
- CApproximately 1.52%
- DApproximately 6.00%
Explanation
Gain = 1,00,000 - 98,500 = ₹1,500. Return over 91 days = 1,500/98,500 = 1.5228%. Annualised = 1.5228% x 365/91 = 6.108%, about 6.11%. Dividing by face value gives 1.5% x 365/91 = 6.02%, a wrong base, and 1.52% is not annualised.
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