If an investor paid $97,710 for a 180 day, $100,000 U.S. Treasury bill, what would be the investor's return on investment quote as a money market yield (i.e. on a 360 day basis)?

To calculate the money market yield (MMY) for the U.S. Treasury bill, we can use the formula:

\[
\text{MMY} = \frac{\text{Discount Amount}}{\text{Purchase Price}} \times \frac{360}{\text{Days to Maturity}}
\]

where:
- **Discount Amount** = Face Value - Purchase Price
- **Purchase Price** is the amount paid for the Treasury bill.
- **Days to Maturity** is the actual holding period, in this case, 180 days.

Given values:
- **Face Value** = $100,000
- **Purchase Price** = $97,710
- **Days to Maturity** = 180

### Step 1: Calculate the Discount Amount
\[
\text{Discount Amount} = 100,000 - 97,710 = 2,290
\]

### Step 2: Apply the MMY Formula
\[
\text{MMY} = \frac{2,290}{97,710} \times \frac{360}{180}
\]

Simplifying inside the formula:
\[
\text{MMY} = \frac{2,290}{97,710} \times 2
\]
\[
\text{MMY} \approx 0.04685 \times 2
\]
\[
\text{MMY} \approx 0.0937 \text{ or } 9.37\%
\]

### Answer
The investor's return on investment, quoted as a money market yield on a 360-day basis, is approximately **9.37%**.

Would you like further clarification or details on any step?

Here are five related questions that expand on this topic:
1. How does the money market yield compare to the bond equivalent yield for the same Treasury bill?
2. What is the effective annual yield for this Treasury bill investment?
3. How would the yield change if the holding period were different?
4. Why is the money market yield calculated on a 360-day basis instead of a 365-day basis?
5. How does the quoted yield affect the liquidity and attractiveness of Treasury bills?

**Tip:** Treasury bill yields can vary depending on whether they are calculated on a 360-day or 365-day basis, which can slightly impact return comparisons between investment options.

Learn how to calculate the money market yield for a U.S. Treasury bill with a face value of $100,000 and a purchase price of $97,710 over a 180-day period. The solution walks through the steps to determine a return on investment quoted as a money market yield on a 360-day basis, approximately 9.37%.

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