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Sagot :
Answer:
12.55%
Explanation:
Note that the T-bill rate of return is annualized based on 360-day count convention, hence, to begin with, let us determine the rate of return over a 90-day maturity period as shown thus:
rate of return over 90 days=(FV-PV)/FV
FV=face value=$50,000
PV=purchase price=$48,500
rate of return over 90 days=($50,000-$48,500)/$50,000
rate of return over 90 days=3.00%
annualized rate of return=(1+90day return)^(360/90)-1
the annualized rate of return=(1+3.00%)^(360/90)-1
the annualized rate of return=12.55%
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