A 93-day Treasury bill is issued at 97 and redeems at 100. Use a 360-day year. In the net case, a hypothetical 12.5% tax on the issue discount is paid upfront, together with a fee of 0.15 per 100 face value. Redemption remains 100. These are exercise assumptions, not current tax guidance.

1. A.Find the gross annual simple yield, then the net yield with tax and fees.

Buy a 24-month zero-coupon bond at issue for 96.30, with gross redemption of 100. In the net case, a hypothetical 12.5% tax on the issue discount is withheld at redemption. There are no fees. Use effective annual compound yields.

1. A.Find gross and net annual yields.