The Discount Yield on a T-Bill Differs from the T-Bill's

question 27

Multiple Choice

The discount yield on a T-Bill differs from the T-bill's bond equivalent yield (BEY) because
I. The discount yield is the return per dollar of face value and the BEY is a return per dollar originally invested.
II. A 360-day year is used on the discount yield and the BEY uses 365 days.
III. The discount yield is calculated without compounding, the BEY is calculated with compounding.

• A) I only
• B) II only
• C) I and II only
• D) II and III only
• E) I, II, and III

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