Mathematics Flashcards
1
Q
What formula would you use to calculate the annual rate of return of a T-Bill
A
Annual rate of return = Rate of return x days in year/ days to maturity
2
Q
How would you work out the discount rate for a commercial paper.
A
Discount rate = (Par value - purchase price /Par value) x (Days in year/ Days to maturity)
3
Q
How would you work out the Buyback price of a repurchase agreement?
A
Buyback price = Selling Price + ( Selling Price x Interest Rate x Days to maturity/ days in year
4
Q
How would you work out the current yield of a treasury Bond
A
Current Yield = Yield to Maturity - (((Par value - Current price)/(Current price) ))/(Year to Maturity)
5
Q
How would you work out the current yield of a coupon
A
Current Yield = Gross annual coupon value / selling price x 100
