A T-Bill Has a Face Value of $10,000 and Is

question 54

Multiple Choice

A T-bill has a face value of $10,000 and is selling for $9,800.If the T-bill matures in 90 days,what is its effective annual yield?

• A) 8.16%.
• B) 2.04%.
• C) 8.54%.
• D) 6.12%.
• E) 8.42%

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables reported on the balance sheet by the amount expected not to be collected.

Past Due Time

Past Due Time refers to the period that has elapsed after the official due date of a payment or obligation, signaling a delay in payment.

Collectibility

The likelihood or ability of an entity to collect on its accounts receivable or outstanding debts.

Account

A record in financial accounting that tracks the financial transactions of a specific asset, liability, equity, revenue, or expense.