It is also known as the periodic rate of return. Holding Period Return = The rate of return realized for a given holding period. Bond Equivalent Yield = (F.V.-P)/P×365/tīond equivalent yield is always higher than the bank discount yield since it is based on the price of the bill rather than face value and it is annualized using 365 days in a year rather than 360 days. Yield is the most effective instrument of evaluating theīond Equivalent Yield = discount on T-bills as a fraction of price which is annualized using 365 days a year. The difference between an Ask price and a bid price is called a bid-ask spread which represents dealers’ profit. When an individual investor wants to buy T-bills from the secondary market they have to pay an Ask price and when he/she wants to sell the T-bills will get a Bid price that is slightly lower than the Ask price. Generally, T-bills are issued for institutional investors first, and with the help of government security dealers, individual investors can purchase by auction from the secondary market easily. T-bills are issued with initial maturities of 4, 13, 26, or 52 weeks. The difference between the face value and the discounted price is earning for the investors. These T-bill securities are exempt from all state and local taxes, another characteristic distinguishing them from other money market instruments. Most of the T-bills are issued with the denomination of $100 and $1000. T-bills are issued at discount from the face value and investors receive face value at maturity. Treasury bills are the short-term debt issued by the government of the country. Short-term securities issued by the government of the related nation. These securities are sold in large denominations and therefore are purchased by economic units such as banks, financial institutions, and corporate organizations that have excess short-term funds. Money market securities are issued by high quality (that is, low default risk) economic units such as governments, financial institutions, and other corporate organizations of sound financial standing that require short-term funds. The market for trading short-term securities is known as the Money market. Which of the following instruments is not traded in a money market?.Which of the following are money market instruments? check all that apply.Prices of money market instruments undergo the least price fluctuations because of.Money Market Instruments | What is Money Market | Assets Classification and Financial Instruments | Investment Management.
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