 # bank discount yield

formula, 5 seconds

D/F x 360/T?!?!?

bonus – formula for discount in \$ terms

soxboys21 Wrote: ------------------------------------------------------- > D/F x 360/T??? got it!

BDY d = (1-p) *360/T

now, tell me how to convert BDY to BEY

pepp Wrote: ------------------------------------------------------- > now, tell me how to convert BDY to BEY BEY = periodic interest rate x 2

daj224 Wrote: ------------------------------------------------------- > pepp Wrote: > -------------------------------------------------- > ----- > > now, tell me how to convert BDY to BEY > > > > BEY = periodic interest rate x 2 doesn’t answer the question

would it be something like BEY = [(1+BDY/360)^(365/2) -1] x 2 ??

I think the conversion should be like that: BDY= D/F*360/t Semiannual effective rate=(1+BDY)^1/2 - 1 BEY=2*Semiannual effective rate Am I correct?

minocfa Wrote: ------------------------------------------------------- > I think the conversion should be like that: > > > BDY= D/F*360/t BDY = (1-p)*360/T but D/F does not equal (1-p)

What is p? D: Discount F: Face Value t: Time to maturity

p is the price of the bond quoted in % of face value.