1. What is the T-Bill Value Calculator?

The T-Bill Value Calculator estimates the current value of a Canadian Treasury Bill using the standard 365-day convention. It calculates based on face value, yield, and days to maturity.

2. How Does the Calculator Work?

The calculator uses the T-Bill valuation formula:

Where:

• \( Face\ Value \) — The maturity value of the T-Bill (in CAD)
• \( Yield \) — The annualized yield (in decimal form, e.g., 0.05 for 5%)
• \( Days \) — Days remaining until maturity

Explanation: The formula discounts the face value based on the yield and time remaining, using Canada's standard 365-day convention.

3. Importance of T-Bill Valuation

Details: Accurate T-Bill valuation is crucial for investors to determine fair prices, compare investment options, and manage fixed-income portfolios effectively.

4. Using the Calculator

Tips: Enter face value in CAD, yield as a decimal (e.g., 0.05 for 5%), and days to maturity. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use 365-day convention in Canada?
A: Canadian financial markets traditionally use 365-day year for T-Bill calculations, unlike some other markets that use 360 days.

Q2: What's the difference between yield and discount rate?
A: Yield is based on the purchase price, while discount rate is based on face value. This calculator uses yield for valuation.

Q3: How accurate is this calculation?
A: This provides the standard theoretical value. Actual market prices may vary slightly due to liquidity and other market factors.

Q4: Can this be used for U.S. T-Bills?
A: No, U.S. T-Bills use different conventions (360-day year and discount rate method).

Q5: What about compounding?
A: T-Bills are simple interest instruments, so compounding isn't factored into this calculation.