7-day USCP is quoted at a rate of discount of 1.75%. What is its true yield?
A) 1.73%
B) 1.75%
C) 1.77%
D) 1.80%

Question

Quizplus · Accepted Answer

The true yield of the USCP can be calculated by subtracting the discount rate from 365 (days in a year) and dividing the result by the number of days in the maturity period (7). 
True yield = (365 - 1.75) / 7 = 52.79
Therefore, the true yield is 1.75%. Choice B is the correct answer.

7-Day USCP Is Quoted at a Rate of Discount of 1.75