govtwork / faq / Errors in T-bill auction results


---------------------------> Joel R. Anderson



                             12 Jan 2000

The Honorable Lawrence H. Summers
Secretary of the Treasury
Fifteenth St. and Pennsylvania Ave NW
Washington DC 20220

Dear Mr Secretary:

Re ERRORs in "Recent Treasury Bill Auction Results"
   reported on the department's website:
   www.publicdebt.treas.gov/servlet/OFBills
   Information provided by the Bureau of the Public Debt.
   Updated January 12, 2000

Prior to considering TreasuryDirect, I thought I would
confirm my ability to duplicate Treasury rate
calculations. Of 5 recent Treasury "discount" rates I
checked, 2 were wrong.

                    Published   Calc'd Inv_Rate
  days2Mat    Price   360_Dis  360_Dis timeBase Inv_Rate  365_APY   CUSIP   Comment
        91   98.677     5.235 5.233846      366 5.392418 5.487211 912795DR9 WRONG
        91   98.645     5.360 5.360439      366 5.524639 5.624532 912795DQ1
        91   98.660     5.300 5.301098      366 5.462650 5.560135 912795DP3 WRONG
       182   97.260     5.420 5.419780      366 5.665340 5.729886 912795ET4
       364   94.292     5.645 5.645274      366 5.997369 6.070661 912795ES6 [1]

 1. A weird formula is used to calculate the investment
    rate for bills of more than one half year to maturity:

Discount rate for bills of all maturities:
    Discount rate = (100-Price)/100 * (360/DaysToMaturity)

Since the published "Investment" rates for all 5 CUSIPs
agree with my calculated "Investment" rates, I think the
mistake is in the Treasury's published "Discount" rate.

                             Very truly yours,



                             Joel R. Anderson

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