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Will you also post the upper question like how many days and what we have to find
So i got it we have to calculate BEY of money market instruments i.e which of the following investment has highest BEY i.e add on rate.
So as we can see investment C is add on rate we don’t have to calculate it. So bey=5.96.
For investment B we know that discount rate is of 360 days bank deposit as we can see it is given for 365 days we have to convert it into 360 days .
=5.80*360/365.
=5.7205 is the BD
So now convert it into 90 days as we have to find hpy
=5.7205*90/360
=1.4301 is the discount rate from par.so price =100-1.4301=98.5699
Now calculate hpy
-98.5699 pv.
100 fv
N 1
Cpt i/y 1.4509
So bey=hpy*365/n.
=1.4509*365/90
=5.8842%
For investment A it is given in 360 days only.
Just calculate the BD of 90 days .
=5.78*90/360
=1.4450 discount from par so price =98.5550
Calculate hpy
-98.5550 pv.
100 fv
N 1
Cpt i/y 1.4662
Bey =1.4662*365/90
=5.9462%
As we can see investment C has highest BEY so option B is the answer
Thanks i understand!!