Financial Services _Çô Client Services RFC126 Lecture Notes - Lecture 5: Spot Contract, Put Option, Dividend Tax
1 Nov 2016
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- sold readily without seller making large price concession. Government bonds < 3 years to maturity. Short term gov"t note - maturity up to 364 days. Sold at discount & mature at par. Purchased by large institutions in large denominations & resold to clients in smaller denominations. Difference is taxable as interest income term. 100% know how to calculate t bill yield. Issued less than 1 year, 364 days 6 months in itll be 182 day t bill, 91 day t bill. Always money market instrument are sold at a discount. Calculate it as though we held it for a full year. 100 price (how much we earned)/ price then convert into 100 so we multiply by 365 / term then * 100 to get it into a percent. 100-99. 30 = 0. 7/99. 3 = 0. 00704934541793 * 365 = 2. 57301107754445/ 30 = 0. 08576703591816 *100 =
