Janine is considering a T-bill priced at $97,645 with a face value of $100,000. What is its quoted yield?

To determine the quoted yield for a Treasury bill (T-bill), you can use the following formula:

[ \text{Yield} = \left( \frac{\text{Face Value} - \text{Purchase Price}}{\text{Purchase Price}} \right) \times \frac{360}{\text{Days to Maturity}} ]

In this scenario, the face value of the T-bill is $100,000, and it is priced at $97,645. The yield calculation reflects the difference between what you will receive at maturity (the face value) and what you pay now (the purchase price).

First, calculate the difference between the face value and the purchase price:

[ 100,000 - 97,645 = 2,355 ]

Then, the yield can be found by taking this difference and dividing it by the purchase price:

[ \frac{2,355}{97,645} \approx 0.0241 \text{ (or 2.41%)} ]

This yields a base rate before considering the days to maturity. Since the question does not specify the number of days to maturity, we typically assume a standard maturity period, and in many cases, T-b