Which of the Following Yield Calculations on a Treasury Bill

question 68

Multiple Choice

Which of the following yield calculations on a Treasury bill provides the best comparison yield for competing coupon-bearing securities of the same maturity?

• A) bank discount rate
• B) CD equivalent rate
• C) bond equivalent rate
• D) the prime rate.

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Definitions:

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Real Income

Income of individuals or nations after adjusting for inflation, representing the actual buying power of the income.

Money Income

Income measured in terms of money received from employment, investments, or other sources, rather than in terms of goods or services.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level, at a specific time.