The bond equivalent yield of a 180-day banker’s acceptance quoted at a discount rate of 4.25% for a 360-day year is closest to:
- 4.31%.
- 4.34%.
- 4.40%
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First find the 180 BD to get the price
=4.25*180/360
=2.125
So price will be 100-2.125=97.875
Now find the hpy for the same
-97.875 pv.
Fv 100
N 1
Cpt i/y 2.17114
Bey =hpy*365/n.
2.17114*365/180
4.40258
I hope this helps you!