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What is the yield John will achieve on his investment

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Reference no: EM132910356

Question - John has today invested in a 180-day bank bill with a face value of $1 million, priced to yield 5.3 per cent per annum. Simultaneously he has sold a futures contract on a 90-day bank bill with a face value of $1 million. The futures contract will expire in 90 days' time from today. The futures price is 94.55. John intends to settle the futures contract by delivery. Ignoring any effects from the mark-to-market rule, what is the yield (simple interest, in per cent per annum) John will achieve on his investment?

Reference no: EM132910356

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