YouTube T3-24: Quote versus cash price of US Treasury bill

[Nicole Seaman]

A US Treasury bill is a (money market) discount instrument: the quoted price represents a discount from the face value. In this example, a quote price of 8.00 on a 90-day US Treasury bill implies a cash price of $98.00 and a true interest rate of 8.163% per annum

David's XLS is here: https://www.dropbox.com/s/4laayea5mm93z8r/073018-discount-instrument.xlsx

 

[danghara]

Hello

Correct formula:
y% = Q% / (1 - Q% * n/360)

Wrong formula(in video):
y% = Q% / (1 + Q% * n/360)

 

[David Harper CFA FRM]

@danghara yep, thanks, I wrote it wrong while talking over my ink, but fortunately the formula bar and calculation are correct