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HELP!!!! Treasury Bill Rate of Return Calculation: Please verify what I think it is.

N

NoReMoRsE

Platinum Member
Hey guys, I have an Actuarial test tomorrow, and the prof didn't give us an explicit formula for calculating the rate of return for a treasury bill. I *think* this is it, but I want to verify with anyone who knows this material:

Rate of Return = (Face Amount - Purchase Price) / Purchase Price

Then, to find the nominal annual rate of return, just multiply the rate of return by (365 / number of days for T-bill)

Is this correct? Thanks.
 
I believe I have found the answer to my question:<a class=ftalternatingbarlinklarge href="http://www.fin.gc.ca/invest/bondprice-e.html" target=blank>

http://www.fin.gc.ca/invest/bondprice-e.html</A>
 
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