26. How is the yield of a Treasury Bill calculated?

It is calculated as per the following formula

Wherein; P Purchase price D Days to maturity Day Count: For Treasury Bills, D = [actual number of days to maturity/365] Illustration Assuming that the price of a 91 day Treasury bill at issue is Rs.98.20, the yield on the same would be

After say, 41 days, if the same Treasury bill is trading at a price of Rs. 99, the yield would then be

Note that the remaining maturity of the treasury bill is 50 days (91-41).