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20 May, 08:20

You buy a $10,000 par treasury bill at $9,575 and sell it 60 days later for $9,675. what was your ear?

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  1. 20 May, 09:18
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    To find the EAR:

    EAR = (sold price/purchase price) ^ (days in year/days you had it) - 1

    EAR = (9,675/9,575) ^ (365/60) - 1

    EAR =.06524

    Then to make the decimal a percentage multiply the answer by 100.

    EAR =.06524 (100)

    EAR - 6.52%
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