What are treasury bills? A registered society bought 91 days treasury bills on August 24, 2015 which matured on October 19, 2015. The rate quoted by seller was ₹ 99.0894 per ₹ 100 face value. Calculate YTM.

Treasury Bills are money market instruments issued by RBI to finance the short term requirements of the Government of India. These are discounted securities and thus are issued at a discount to face value. The return to the investor is the difference between the maturity value and issue price. Calculation of YTM: Y = [(100 - P) / P] × (365 / D) × 100 Where: Y = Discounted yield P = Price = 99.0894 D = Days to maturity The days to maturity of Treasury bill are (August - 8 days, September - 30 days, October - 18 days = 56 days) Y = [(100 - 99.0894) / 99.0894] × (365 / 56) × 100 Y = [0.9106 / 99.0894] × 6.517857 × 100 Y = 0.009189 × 6.517857 × 100 Y = 0.05990 × 100 = 5.99%