This document provides an overview of key concepts for pricing and trading fixed-income securities such as bonds. It discusses how interest rates impact bond prices, and how the present value of a bond's future cash flows can be used to determine the fair price to pay today. Various bond yields including current yield and approximate yield to maturity are also explained, along with how they relate to whether a bond is trading at a premium or discount.

1. CSI Global Education Inc. Investment Products CHAPTER 7: Fixed-Income Securities: Pricing and Trading

11. T-Bill Yields How to remember the formula: Yield = (positive number) × (number = or > 1)

12. T-Bill Yields a) What is the yield on a 181 day T-bill purchased for $98,000? b) What is the yield on a 90 day T-bill purchased for 99?

13. T-Bill Yields a) What is the yield on a 181 day T-bill purchased for $98,000? = (100,000 – 98,000) / 98,000 × 365/181 = 2,000 / 98,000 × 365/181 = 4.12% b) What is the yield on a 90 day T-bill purchased for 99? = 100 – 99 / 99 × 365/90 = 1/99 × 365/90 = 4.10%